Article Sidebar

Download
pdf
Statistic
Read Counter : 351 Download : 41

Downloads

Download data is not yet available.

Main Article Content

Abstract

The SME sector experienced a decline in financial performance during the pandemic. In addition, there are changes in SME owners' financial behavior, which impact financial decision-making. The financial behavior of SME owners can be seen in risk attitudes, mental accounting, and overconfidence. This study explores the relationship between risk attitudes, mental accounting, and overconfidence in investment and financing decisions. This study took the population of UKM owners in Banyumas Regency, Central Java Province, Indonesia.. The sample used in the study amounted to 116 SME owners. The results provide empirical evidence that risk attitudes and mental accounting have not significantly influenced investment decisions. Overconfidence can improve the investment decisions of SME owners. The results of the study confirm that lower-risk attitudes will have an impact on enhancing financing decisions. A high level of mental accounting will result in better financing decisions. Overconfidence does not influence financing decisions.

Keywords

Risk Attitudes Mental Accounting Overconfidence Financing Decisions Investment Decisions

Article Details

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

References

  1. Abdeldayem, M. M., & Sedeek, D. S. (2018). Managerial behavior and capital structure decisions; do overconfidence, optimism and risk aversion matter? Asian Economic and Financial Review, 8(7), 925–945. https://doi.org/10.18488/journal.aefr.2018.87.925.945
  2. Abul, S. J. (2019). Factors influencing Individual Investor Behaviour: Evidence from the Kuwait Stock Exchange. Asian Social Science, 15(3), 27. https://doi.org/10.5539/ass.v15n3p27
  3. Adeneye, Y. B., & Chu, E. Y. (2020). Managerial aversion and capital structure: Evidence from southeast asia. Asian Academy of Management Journal of Accounting and Finance, 16(1), 155–183. https://doi.org/10.21315/aamjaf2020.16.1.8
  4. Adielyani, D., & Mawardi, W. (2020). The Influence of Overconfidence, Herding Behavior, and Risk Tolerance on Stock Investment Decisions: The Empirical Study of Millennial Investors in Semarang City. Jurnal Maksipreneur: Manajemen, Koperasi, Dan Entrepreneurship, 10(1), 89. https://doi.org/10.30588/jmp.v10i1.691
  5. Adil, M., Singh, Y., & Ansari, M. S. (2022). How financial literacy moderate the association between behaviour biases and investment decision? Asian Journal of Accounting Research, 7(1), 17–30. https://doi.org/10.1108/AJAR-09-2020-0086
  6. Ahmad, M., & Shah, S. Z. A. (2020). Overconfidence heuristic-driven bias in investment decision-making and performance: mediating effects of risk perception and moderating effects of financial literacy. Journal of Economic and Administrative Sciences. https://doi.org/10.1108/jeas-07-2020-0116
  7. Almansour, B. Y., Elkrghli, S., & Almansour, A. Y. (2023). Behavioral finance factors and investment decisions: A mediating role of risk perception. Cogent Economics and Finance, 11(2). https://doi.org/10.1080/23322039.2023.2239032
  8. Altaf, H., & Jan, A. (2023). Generational theory of behavioral biases in investment behavior. Borsa Istanbul Review, 23(4), 834–844. https://doi.org/10.1016/j.bir.2023.02.002
  9. Andriyani, L., Dewi, V. S., & Larasati, C. D. (2022). Investigation of Firm Value in Transportation Sector: The Impact of Covid 19 in Indonesia. The 4th Borobudur International Symposium on Humanities and Social Science 2022 (BIS-HSS 2022), 2022(4), 1380–1388. https://doi.org/10.2991/978-2-38476-118-0_155
  10. Ayad, K., Touil, A., Hamidi, N. El, & Bennani, K. D. (2024). Does behavioral biases matter in SME s ’ borrowing decisions ? Insights from Morocco. Banks and Bank Systems, 19(1), 170–182. https://doi.org/10.21511/bbs.19(1).2024.15
  11. Az-zahara, C. T. M., Tubastuvi, N., Purwidianti, W., & Bagis, F. (2024). Analisis Pengaruh Risk Perception , Risk Tolerance , Overconfidence , Dan Loss Aversion Terhadap. Ecobisma, 11(1), 62–76.
  12. Bakar, S., & Yi, A. N. C. (2016). The Impact of Psychological Factors on Investors’ Decision Making in Malaysian Stock Market: A Case of Klang Valley and Pahang. Procedia Economics and Finance, 35(October 2015), 319–328. https://doi.org/10.1016/s2212-5671(16)00040-x
  13. Batool, A., Awan, T., & Chughtai, S. (2022). Impact of CEO Overconfidence on Corporate Financing Decision with Mediating Role of Risk Perception. Business Review, 16(2), 77–95. https://doi.org/10.54784/1990-6587.1375
  14. Bell, D. E. (1982). Regret in Decision Making Under Uncertainty. Oper Res, V 30(N 5), 961–981. https://doi.org/10.1287/opre.30.5.961
  15. Broll, U., Welzel, P., & Wong, K. P. (2017). The firm under regret aversion. 03, 1–16.
  16. Brown, R., & Rocha, A. (2020). Entrepreneurial Uncertainty During The Covid-19 Crisis : Mapping The Temporal Dynamics of Entrepreneurial Finance. Journal of Business Venturing Insights, 14(January).
  17. Fridana, I. O., & Asandimitra, N. (2020). Analisis Faktor Yang Memengaruhi Keputusan Investasi (Studi Pada Mahasiswi Di Surabaya). Jurnal Muara Ilmu Ekonomi Dan Bisnis, 4(2), 396. https://doi.org/10.24912/jmieb.v4i2.8729
  18. Goswami, S., Sharma, R. B., & Chouhan, V. (2022). Impact of Financial Technology (Fintech) on Financial Inclusion(FI) in Rural India. Universal Journal of Accounting and Finance, 10(2), 483–497. https://doi.org/10.13189/ujaf.2022.100213
  19. Grežo, M. (2020). Overconfidence and financial decision-making: a meta-analysis. Review of Behavioral Finance, 13(3), 276–296. https://doi.org/10.1108/RBF-01-2020-0020
  20. Hidayati, S. A. (2016). Mental Accounting dan Dampaknya Terhadap Kinerja Perusahaan Melalui Penempatan Modal Kerja Pada Usaha Kecil dan Menengah di Pulau Lombok. Jmm Unram - Master of Management Journal, 16(1). https://doi.org/10.29303/jmm.v16i1.14
  21. Hidayati, S. A., Wahyulina, S., & Suryani, E. (2018). Behavioral Finance Dan Pengaruhnya Terhadap Pengambilan Keputusan Hutang (Studi Pada Usaha Kecil Dan Menengah (UKM) di Pulau Lombok ). Jmm Unram - Master of Management Journal, 7(1). https://doi.org/10.29303/jmm.v7i1.270
  22. Hoque, M. Z. (2017). Mental budgeting and the financial management of small and medium entrepreneurs. Cogent Economics and Finance, 5(1). https://doi.org/10.1080/23322039.2017.1291474
  23. Irfan, M., Adeel, R., & Malik, M. S. (2023). The Impact of Emotional Finance, and Market Knowledge and Investor Protection on Investment Performance in Stock and Real Estate Markets. SAGE Open, 13(4), 1–18. https://doi.org/10.1177/21582440231206900
  24. Itzkowitz, J., & Itzkowitz, J. (2017). Name-Based Behavioral Biases: Are Expert Investors Immune? Journal of Behavioral Finance, 18(2), 180–188. https://doi.org/10.1080/15427560.2017.1308940
  25. Juergensen, J., Guimón, J., & Narula, R. (2020). European SMEs Amidst the COVID-19 Crisis: Assessing Impact and Policy Responses. Journal of Industrial and Business Economics, 47(3), 499–510. https://doi.org/10.1007/s40812-020-00169-4
  26. Kaakeh, A. (2018). Behavioural Finance in Islamic Finance, A new Approach. Universitat Autònoma de Barcelona.
  27. Kahneman, D., & Tversky, A. (1974). Judgment under Uncertainty - Heuristics and Biases. Science, 185(4157), 1124–1131. https://doi.org/10.1126/science.185.4157.1124
  28. Kartini, K., & Nahda, K. (2021). Behavioral Biases on Investment Decision: A Case Study in Indonesia. Journal of Asian Finance, Economics and Business, 8(3), 1231–1240. https://doi.org/10.13106/jafeb.2021.vol8.no3.1231
  29. Kitigin, B. (2017). Relationship between Risk-Taking and Business Performance among Small and Medium Enterprises in Eldoret Town, Kenya. International Journal of Business and Management Review, 5(7), 52–59.
  30. Lather, A. S., Jain, S., & Anand, S. (2020). The effect of personality traits on cognitive investment biases. Journal of Critical Reviews, 7(2), 221–229. https://doi.org/10.31838/jcr.07.02.39
  31. Lindner, F., Kirchler, M., Rosenkranz, S., & Weitzel, U. (2019). Social Status and Risk-Taking in Investment Decisions. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3382275
  32. Loomes, G., & Sugden, R. (1982). Regret Theory: An Alternative Theory of Rational Choice Under Uncertainty. The Economic Journal, 92(368), 805. https://doi.org/10.2307/2232669
  33. Mahapatra, M. S., & Mishra, R. (2020). Behavioral influence and financial decision of individuals: A study on mental accounting process among Indian households. Cogent Economics and Finance, 8(1). https://doi.org/10.1080/23322039.2020.1827762
  34. Mohanty, S. (2023). Cognitive biases and financial decisions of potential investors during Covid-19: an exploration. Arab Gulf Journal of Scientific Research. https://doi.org/10.1108/AGJSR-12-2022-0296
  35. Mundi, H. S., & Kaur, P. (2022). CEO Overconfidence and Capital Structure Decisions: Evidence from India. Vikalpa, 47(1), 19–37. https://doi.org/10.1177/02560909221079270
  36. Naomi, C., Kiprop, S., & Tanui, J. (2018). Influence of Herding Behavior on Investment Decision of SMEs in Bomet County , Kenya. East African Scholars Journal of Economics, Business and Management, 4464(2), 34–39.
  37. Nareswari, N., Salsabila Balqista, A., & Priyo Negoro, N. (2021). The The Impact of Behavioral Aspects on Investment Decision Making. Jurnal Manajemen Dan Keuangan, 10(1), 15–27. https://doi.org/10.33059/jmk.v10i1.3125
  38. Nosi, A. (2010). The Influence of Expectations , Risk Attitudes , and Behavioral Biases on Investment Decisions. In Universit¨at Mannheim.
  39. Novandalina, A., Ernawati, F. Y., & Adriyanto, A. T. (2022). Risk Attitudes, Mental Accounting and Overconfidence in Investment Placement Decision During and Post Covid-19. International Journal of Economics, Business and Accounting Research (IJEBAR), 6(1), 498. https://doi.org/10.29040/ijebar.v6i1.4453
  40. Nurmoko, A. H. (2023). Strategi Pengembangan Ekonomi Banyumas : Memanfaatkan Keunggulan dan Peluang (Issue February).
  41. Petrík, V., & Sedliačiková, M. (2017). The Implications of Behavioral Finance in a Company ’ s Innovation Decision The Implications of Behavioral Finance in a Company ’ s Innovation Decision Making. May.
  42. Pham, V. Q., & Nguyen, D. T. (2019). the Impact of Managerial Overconfidence on Capital Structure: Empirical Evidences in Vietnam. International Journal of Economics and Financial Issues, 9(6), 216–224. https://doi.org/10.32479/ijefi.8862
  43. Pierre-Olivier Gourinchas, Kalemli-Özcann, Ṣebnem, Penciakova, V., & Sander, N. (2020). COVID-19 and SME Failure. In NBER Working Pape (Vol. 28, Issue 2).
  44. Pompian, M. M. (2012). Behavioral Finance and Wealth Management. In Behavioral Finance and Wealth Management: How to Build Investment Strategies That Account for Investor Biases. Wiley. https://doi.org/10.1002/9781119202400
  45. Pratono, A. H. (2018). Does firm performance increase with risk-taking behavior under information technological turbulence?: Empirical evidence from Indonesian SMEs. Journal of Risk Finance, 19(4), 361–378. https://doi.org/10.1108/JRF-10-2017-0170
  46. Purwidianti, W., Pramuka, B. A., Laksana, R. D., & Wiwiek, R. A. (2023). Maqāṣid Entrepreneurial Finance: An Islamic Approach to Small Business Capital Structure Theory. ISRA International Journal of Islamic Finance, 15(3), 25–45. https://doi.org/10.55188/ijif.v15i3.609
  47. Purwidianti, W., Rahmawati, I. Y., & Dwiyanti, R. (2023). Overconfidence and Herding Bias on Investment Decisions the Role of Risk Perception as a Mediator. Asian Journal of Economics, Business and Accounting, 23(18), 36–45. https://doi.org/10.9734/ajeba/2023/v23i181056
  48. Purwidianti, W., Rahmawati, I. Y., & Purwanto, L. A. (2022). Information Technology and Religiosity as Moderating Variables of the Relationship between Investment Risk-Taking and Firm Performance. Jurnal Manajemen Dan Kewirausahaan, 10(2), 111–118. https://doi.org/http://dx.doi.org/10.26905/jmdk.v10i2.8241
  49. Purwidianti, W., & Tubastuvi, N. (2019). The Effect of Financial Literacy and Financial Experience on SME Financial Behavior in Indonesia. Jurnal Dinamika Manajemen, 10(36), 40–45.
  50. Putri, G. D., Purwidianti, W., Innayah, M. N., & Alfalisyado. (2023). Investment Decisions: Are Financial Knowledge, Risk Tolerance and Experience Important? South Asian Journal of Social Studies and Economics, 20(4), 250–260. https://doi.org/10.9734/sajsse/2023/v20i4756
  51. Rahman, M., & Gan, S. S. (2020). Generation Y investment decision: an analysis using behavioural factors. Managerial Finance, 46(8), 1023–1041. https://doi.org/10.1108/MF-10-2018-0534
  52. Rao, P., & Kumar, S. (2018). Reflection of owner’s attributes in financing decisions of SMEs. Small Enterprise Research, 25(1), 52–68. https://doi.org/10.1080/13215906.2018.1428908
  53. Raveendra, P. V., Singh, J. E., Singh, P., & Kumar, S. S. (2018). Behavioral finance and its impact on poor financial performance of SMES: A review. International Journal of Mechanical Engineering and Technology, 9(5), 341–348.
  54. Raza, S. A., Jawaid, T., & Hussain, A. (2014). Risk and investment decisions in stock markets: evidence from four Asian countries. International Journal of Managerial and Financial Accounting, 6(3), 227–250. https://doi.org/10.1504/IJMFA.2014.065240
  55. Sabir, S. A., Mohammad, H. Bin, & Shahar, H. B. K. (2019). The role of overconfidence and past investment experience in herding behaviour with a moderating effect of financial literacy: Evidence from pakistan stock exchange. Asian Economic and Financial Review, 9(4), 480–490. https://doi.org/10.18488/journal.aefr.2019.94.480.490
  56. Safaie, N., Sadighi, A., & Ghazani, M. M. (2024). Analyzing the interrelations among investors’ behavioral biases using an integrated DANP method. Decision Science Letters, 13(1), 119–134. https://doi.org/10.5267/dsl.2023.11.003
  57. Santi, F., Sahara, N. V., & Kamaludin. (2019). the Effect of Mental Accounting on Student’S Investment Decisions: a Study At Investment Gallery (Gi) Feb University of Bengkulu and Syariah Investment Gallery (Gis) Feb Iain Bengkulu. Journal of Business Economics, 24(2), 152–167. https://doi.org/10.35760/eb.2019.v24i2.1907
  58. Sapkota, M. P. (2023). Emotional Biases and Equity Investment Decision of Individual Investors. Journal of Business and Management Review, 4(1), 036–049. https://doi.org/10.47153/jbmr41.5682023
  59. Sumtoro, A., & Anastasia, N. (2015). Perilaku Keuangan dalam Pengambilan Keputusan Berinvestasi Properti Residensial di Surabaya. Finesta, 3(1), 41–45.
  60. Suyati, S., & Ratnawati, A. T. (2023). The Role of Behavioral Finance in Formal Debt Decisions Study of Micro Small Medium Enterprises (MSMEs) Semarang. East Asian Journal of Multidisciplinary Research, 2(8), 3323–3334. https://doi.org/10.55927/eajmr.v2i8.5305
  61. Syarkani, Y., & Alghifari, E. S. (2022). The influence of cognitive biases on investor decision-making: the moderating role of demographic factors. Jurnal Siasat Bisnis, 26(2), 183–196. https://doi.org/10.20885/jsb.vol26.iss2.art5
  62. Thaker, M. A. B. M. T., Mohammed, M. O., Duasa, J., & Abdullah, M. A. (2016). The Behavioral Intention of Micro Enterprises to Use The Integrated Cash Waqf Micro Enterprise Investment (ICWME-I) Model as a Source of Financing. Gadjah Mada International Journal of Business, 18(2), 111–130. https://doi.org/https://doi.org/10.22146/gamaijb.12565
  63. Thaler, R. (1999). Mental accounting. Journal of Behavioral Decision Making, 12(3), 183–206. https://doi.org/10.1016/S0034-3617(05)00518-7
  64. Wong, A., Holmes, S., & Schaper, M. T. (2018). How do small business owners actually make their financial decisions? Understanding SME financial behaviour using a case-based approach. Small Enterprise Research, 25(1), 36–51. https://doi.org/10.1080/13215906.2018.1428909
  65. Wong, K. P. (2015). A regret theory of capital structure. Finance Research Letters, 12(December), 48–57. https://doi.org/10.1016/j.frl.2014.12.001
  66. Wood, R., & Zaichkowsky, J. L. (2004). Attitudes and Trading Behavior of Stock Market Investors: A Segmentation Approach. Journal of Behavioral Finance, 5(3), 170–179. https://doi.org/10.1207/s15427579jpfm0503_5
  67. Yang, Y., & Wang, J. qiang. (2018). SMAA-based model for decision aiding using regret theory in discrete Z-number context. Applied Soft Computing Journal, 65, 590–602. https://doi.org/10.1016/j.asoc.2018.02.001
  68. Zafar, S., Ashraf, S., & Raza, T. (2024). The Investment Decision-Making: Understanding Overconfidence, Herding anf Risk Aversion Among Individual Investors. Journal Pf Social Sciences Development, 03(01), 32–44.