The Relationship between Risk Propensity, Risk Perception and Risk-Taking Behaviour in an Emerging Market
This paper reports evidence to support a relationship between risk propensity, risk perception, and risk-taking behaviour of investors in an emerging market. Primary data were gathered using a validated structured questionnaire, which was self-administered by respondents: there were 162 investors fr...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
| Published: |
Universiti Utara Malaysia
2013-03-01
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| Series: | The International Journal of Banking and Finance |
| Subjects: | |
| Online Access: | https://www.e-journal.uum.edu.my/index.php/ijbf/article/view/8471 |
| _version_ | 1797958205372891136 |
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| author | Fazelina Sahul Hamid Gary John Rangel Fauziah M. Taib Ramayah Thurasamy |
| author_facet | Fazelina Sahul Hamid Gary John Rangel Fauziah M. Taib Ramayah Thurasamy |
| author_sort | Fazelina Sahul Hamid |
| collection | DOAJ |
| description | This paper reports evidence to support a relationship between risk propensity, risk perception, and risk-taking behaviour of investors in an emerging market. Primary data were gathered using a validated structured questionnaire, which was self-administered by respondents: there were 162 investors from 8 stockbroking companies. A multiple regression was used to test the direct and indirect effects of the identified behavioural characteristics on investment decision. Risk propensity was found to be positively related to risk-taking behaviour whereas risk perception was negatively related to risk-taking behaviour. It was further found that risk perception partially mediates the effect of propensity to take risk. This suggests that the perceptual framing of a situational context in the investors’ thought processes reduces but it does not totally overwhelm the innate personality traits with respect to either the investor’s risk-seeking or risk-averseness. The tendency to engage in risky behaviour is more psychological in nature. The implications of the research are further explored.
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| first_indexed | 2024-04-11T00:15:37Z |
| format | Article |
| id | doaj.art-a6b254975a694f1da7e6563898371e54 |
| institution | Directory Open Access Journal |
| issn | 2811-3799 2590-423X |
| language | English |
| last_indexed | 2024-04-11T00:15:37Z |
| publishDate | 2013-03-01 |
| publisher | Universiti Utara Malaysia |
| record_format | Article |
| series | The International Journal of Banking and Finance |
| spelling | doaj.art-a6b254975a694f1da7e6563898371e542023-01-09T03:08:12ZengUniversiti Utara MalaysiaThe International Journal of Banking and Finance2811-37992590-423X2013-03-01101The Relationship between Risk Propensity, Risk Perception and Risk-Taking Behaviour in an Emerging MarketFazelina Sahul Hamid0Gary John Rangel1Fauziah M. Taib2Ramayah Thurasamy3Universiti Sains MalaysiaMonash University MalaysiaUniversiti Sains MalaysiaUniversiti Sains MalaysiaThis paper reports evidence to support a relationship between risk propensity, risk perception, and risk-taking behaviour of investors in an emerging market. Primary data were gathered using a validated structured questionnaire, which was self-administered by respondents: there were 162 investors from 8 stockbroking companies. A multiple regression was used to test the direct and indirect effects of the identified behavioural characteristics on investment decision. Risk propensity was found to be positively related to risk-taking behaviour whereas risk perception was negatively related to risk-taking behaviour. It was further found that risk perception partially mediates the effect of propensity to take risk. This suggests that the perceptual framing of a situational context in the investors’ thought processes reduces but it does not totally overwhelm the innate personality traits with respect to either the investor’s risk-seeking or risk-averseness. The tendency to engage in risky behaviour is more psychological in nature. The implications of the research are further explored. https://www.e-journal.uum.edu.my/index.php/ijbf/article/view/8471risk propensityrisk perceptionrisk-taking behaviourempirical study |
| spellingShingle | Fazelina Sahul Hamid Gary John Rangel Fauziah M. Taib Ramayah Thurasamy The Relationship between Risk Propensity, Risk Perception and Risk-Taking Behaviour in an Emerging Market The International Journal of Banking and Finance risk propensity risk perception risk-taking behaviour empirical study |
| title | The Relationship between Risk Propensity, Risk Perception and Risk-Taking Behaviour in an Emerging Market |
| title_full | The Relationship between Risk Propensity, Risk Perception and Risk-Taking Behaviour in an Emerging Market |
| title_fullStr | The Relationship between Risk Propensity, Risk Perception and Risk-Taking Behaviour in an Emerging Market |
| title_full_unstemmed | The Relationship between Risk Propensity, Risk Perception and Risk-Taking Behaviour in an Emerging Market |
| title_short | The Relationship between Risk Propensity, Risk Perception and Risk-Taking Behaviour in an Emerging Market |
| title_sort | relationship between risk propensity risk perception and risk taking behaviour in an emerging market |
| topic | risk propensity risk perception risk-taking behaviour empirical study |
| url | https://www.e-journal.uum.edu.my/index.php/ijbf/article/view/8471 |
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