International Journal of Behavioural Accounting and Finance (5 papers in press)

Regular Issues

• Diversity at work: how relational demography and influence tactics impact the effectiveness of leaders  
  by Thomas D'Angelo, Marco Lam, Heidi Dent, Martin Kissler, Julia Goldsmith 
  Abstract: The aim of this paper is to explore the joint effect of relational demography and influence tactics on the effectiveness of leaders. To meet this objective, we use an experimental design to examine the role gender and ethnicity play on superiors’ attempts to persuade subordinates to create budgetary slack, thereby violating company policy. We manipulate the superior’s gender and ethnicity by presenting participants with randomly selected photographs of their superiors. Our findings suggest that gender and ethnicity alone do not impact the effectiveness of managers. However, relational demography, interpretation of a superior’s message and influence tactic used, does affect the quality of superior-subordinate relationships. This in turn affects the willingness of subordinates to comply with their superior’s wishes. This holds true even in cases where the subordinate acknowledges their action violates company policy. We conclude that relationships matter more in inspiring action than the gender or ethnicity of either party.
  Keywords: relational demography; budgetary slack; influence tactics; diversity; gender; ethnicity; LMX Theory; organisational behaviour.
  DOI: 10.1504/IJBAF.2023.10054937
   
  
• Does any behavioural bias prevail while making investment decisions in mutual fund?  
  by Farana Kureshi, Viral Bhatt, Priyanka Bhatt 
  Abstract: This study tries to classify the investors with respect to various types of behavioural biases that subconsciously create internal hindrances amongst the investors regarding mutual fund investments. For this, the researchers collected opinions of the 426 investors who hesitate in making investment in mutual funds and cluster analysis was performed to understand the classification of behavioural biases through SPSS software 25.0. Findings reveal that the total respondents have been bifurcated into 3 clusters having respondents sharing homogeneous views. Further it has been found out that out of all the selected bias, over confidence bias and mental accounting bias have dominance over the respondents. Thus this study will help in understanding various biases with regard to investment in mutual fund throwing light on the behavioural finance concept. It would be easy for strategy formulators to frame the strategies which further enhance the investment in mutual funds among investors.
  Keywords: behavioural finance; behavioural biases; mutual fund; investment biases; investor’s biases towards mutual fund; mutual fund investment; investment decisions; mental accounting bias; overconfidence bias; cluster analysis.
  DOI: 10.1504/IJBAF.2023.10054966
   
  
• The control of risk in financial decisions: illusion or reality?  
  by Antonio D'Amato, Emiliano Mastrolia 
  Abstract: Based on a sample of Italian students enrolled in a master’s degree course in economics, this work investigates the illusion of control in financial decisions under uncertainty. In four experimental rounds, empirical results provided evidence that is compatible with the illusion of control as the participants demonstrated a greater propensity to invest in a risky asset in the experimental rounds where they believed to have higher control of the events. However, participants have a low propensity to pay to control the game. These results are supported by an investigation of the locus of control. The results highlight that participants have a high perception that they can control a given situation. Consequently, the participants that express high internal control are more prone to allocate resources to a risky asset. Implications for theory and practice are also discussed.
  Keywords: risk; illusion of control; investment; finance; decision.
  DOI: 10.1504/IJBAF.2023.10055873
   
  
• Family business: the role of target non-financial characteristics in M&A activities. An explanatory analysis of the Italian context  
  by Anastsia Giakoumelou, Beatrice Sciarra, Felice Petruzzella 
  Abstract: Family businesses are major contributors to the worlds economy, but their actual contribution is difficult to evaluate due to a lack of consensus around the very definition of a family business. This study investigates whether non-financial family-related factors determine deal value in extraordinary financial operations that involve controlling stakes. The aim of this study is to bridge a gap in literature on the role of family-related non-financial factors in the M&A context when family firms are involved as target. Our findings highlight that the presence of the firms founder among the selling shareholders and a higher stake of family shareholders retaining governance or management roles in the firm post-operation negatively affect the acquisition price. This study has important theoretical and managerial implications that can help academics and practitioners understand the deal value determinants in the M&A context.
  Keywords: family business; target; non-financial characteristics; M&A; control.
  DOI: 10.1504/IJBAF.2023.10056539
   
  
• Herding behaviour and investors sentiment: evidence from the Chinese Stock Market  
  by Nait Bouzid Khalil, Rabiai Sara, Inariten Soraya, Bakri Widad 
  Abstract: Using monthly data, this study analyses the effect of investors' sentiment on herding behavior. This study uses C.I.C.S.I Index as a proxy of investors' sentiment in the Chinese Stock Market. The finding provides no empirical evidence of the existence of herding propensity in the Chinese Stock Market covering the whole period from 2003 to 2018 and overall sub-periods including pre-financial crisis (BFC) , during financial crisis (FC), and post-financial crisis (AFC), which is consistent with the idea that herding behavior is a short-lived phenomenon (Christie & Huang, 1995). However, when conditioning herding on investors sentiment, herding intensity is more evidenced within the Chinese A-shares market, where individual investors are the major traders, implying that herding within the Chinese A-shares market is a long-lived phenomenon. Finally, this study documents that herding exists in the Chinese Stock Market and varies with levels of investors' sentiment, market trends and sub-periods. Furthermore, the finding provides supplementary evidence that the level of investors' sentiment is a significant aspect in identifying different herding trends among individual investors.
  Keywords: herding behaviour; investors sentiment; Chinese Stock Market; sub-periods analysis; CSAD; cross-sectional absolute deviation of returns.