Designing A Risk-Taking Capacity Model of Individual Investors Using Grounded Theory

Document Type : Research Paper

Authors

1 Ph.D. Candidate of Accounting, Sari Branch, Islamic Azad University, Sari, Iran.

2 Assistant of Accounting, Sari Branch, Islamic Azad University, Sari, Iran.

3 Associate of Accounting, Neyshabur Branch, Islamic Azad University, Neyshabur, Iran.

10.22103/jdc.2023.21763.1404

Abstract

Objective: Due to the expansion of the capital market in the past years and the people's unique acceptance of this market, behavioral financial studies of individual investors have become more important. The complexity of the decision-making process has caused any decision to be influenced by the Attributes of each investor. Risk-taking capacity is one of the most important components that is a function of the decision maker's Attributes. This study seeks to empirically identify the factors affecting the risk-taking capacity of investors. So far, few researches have been done regarding the risk-taking capacity of individual investors in the capital market, and there is little information about the behavior of investors in this field. Therefore, there is a significant gap in this field and this study helps to fill this gap in the literature by identifying the factors affecting the risk-taking capacity of individual investors. We in this study aimed to find, what determines how much risk investors take in the capital market? Went on this way that Using the opinions of experts, present the risk-taking capacity of investors in Iran's capital market of the grounded theory approach.
 Method: The personality trait criterion consists of five specific personality attributes, including agreeableness, conscientiousness, neuroticism (emotional instability), extraversion, and openness to experience. In this study, we used a quasi-experimental design and a post-event approach. To test the hypotheses, we used a structural equations model (version 3 of Smart PLS software).
 Results: In this process, 52 concepts and 29 open codes were created and were grouped in the main 6 axes of the grounded theory. Based on the analysis of the questionnaire data, due to the lack of software distribution, the research model was tested and confirmed by the partial least squares method with the help of SmartPLS version 2 software.
All the interviewees, equivalent to 100, have mentioned the five variables including the personality of the investor, the company situation, the conditions of the micro and macro economy, the Investor's knowledge status and the technical analysis of stocks and markets. Also, the category of investor personality, in addition to the number of repetitions of the codes, in terms of generality and comprehensiveness among the respondents, was also a priority, which shows the importance of this category. The categories of attributes of online transactions (including ease of access and lack of restrictions) with 5 repetition codes and social conditions (including the concepts of the impact of social welfare, social security, social responsibility, ethnicity and geographical region) with 7 repetition codes had the lowest percentage of frequency and generality.
 Conclusion: The analysis of the collected data in terms of frequency indicates that the categories of investor personality (including investor's emotional biases and investor's cognitive biases) with the number of 162 repetitions of the code is ranked first, company situation (including liquidity situation, industry situation, company efficiency, company profitability, structural condition and company size) with the number of codes 119 is ranked second, micro and macro economic conditions with the number of codes 78 is ranked third, the situation of investor knowledge (including the three concepts of having investment knowledge, having financial literacy and having the knowledge of reading stock charts) ranked fourth with 73 codes and technical analysis of stocks and markets ranked fifth with 70 codes.
Finally, the paradigm model was categorized into 6 main dimensions of causal conditions, intervening, contextual, central phenomenon, strategies and consequences.
The most important influencing factors in each dimension on the risk-taking capacity of individual investors were determined as follows:

In the dimension of causal conditions, in the order of a) variable of investment knowledge of the investor b) trust of investors to the market c) having financial literacy d) Being aware of market psychology.
In the dimension of intervening conditions, a) the variables of job and expertise and the amount of income of the investor and b) the variable of self-management of the investor.
Next, the background conditions, a) variables: exchange rate, inflation rate, bank interest rate and deposit interest rate, b) global price variables and the occurrence of wars in the world and c) attention to political conditions and the effects of sanctions.
In the dimension of the central phenomenon, a) variable of technical analysis of the whole market, b) technical analysis of stocks and c) knowledge of fundamental analysis.
In terms of strategies a) determining the strategy in the three axes of analytical strategy, time strategy and investment resources strategy, b) simultaneous use of fundamental variables and technical models and charts to predict the future, c) the ability to predict the future and readiness to face it and d) having the power of patience and tolerance to create change and achieve results.

In terms of consequences, a) choosing the optimal portfolio, including choosing the best companies in the best industries, b) choosing a portfolio (basket) of stocks with a P/E lower than the market P/E, and c) determining the return expected by the investor.

Keywords

Main Subjects

References

آقازاده، هاشم؛ اسفیدانی، محمد‌رحیم و قلی‌مطلق، مجید (1395). طراحی مقیاس ارزیابی اخلاقی فروش شخصی. پژوهش‌های مدیریت در ایران، ۲۰(۳)، ۱-۲۴ https://mri.modares.ac.ir/article_399_b60118fb404d773dbc25c908db87a0c0.pdf.
پناهی، بلال؛ فتحی، محمدرضا؛ مهدیه نجف‌آبادی، علی و رضی محب‌سراج، سمیه (1401). بررسی الگوی ارتباطی بین رفتارهای گذشته و سواد مالی با قصد سرمایه‌گذاری در بازار سهام با نقش میانجی متغیرهای فردی. مجله توسعه و سرمایه، 7(2)، 190-173 https://jdc.uk.ac.ir/article_3320_798335fc4c513b26a5f7dd50b63fdadb.pdf.
تیشه‌یار، ماندانا (1390). آینده‌پژوهی در مطالعات استراتژیک. چاپ اول، پژوهشکده مطالعات راهبردی، تهران.
جلیلی، اسماعیل؛ مشبکی، اصغر؛ خدادادحسینی، سید حمید و آذر، عادل (1398). طراحی مدل اجرای استراتژی ادغام سازمان‌های دولتی ایران. پژوهش‌های مدیریت در ایران، ۲۳(۲)، 181-151 https://mri.modares.ac.ir/article_498_0758f1a7e2097b3ce5436e05e1f283e5.pdf.
دانایی‌فرد، حسن و اسلامی، آذر (1390). کاربرد استراتژی نظریه داده‌بنیاد در عمل، ساخت نظریه بی‌تفاوتی سازمانی. چاپ اول، انتشارات دانشگاه امام صادق (علیه‌السلام)، تهران.
دانایی‌فرد، حسن؛ الوانی، سیدمهدی و آذر، عادل (1398). روش‌شناسی پژوهش کیفی در مدیریت: رویکردی جامع. چاپ ششم، انتشارات صفار، تهران.
دانایی‌فرد، حسن و امامی، سیدمجتبی (1386). استراتژی‌های پژوهش کیفی: تأملی بر نظریه‌پردازی داده‌بنیاد. اندیشه مدیریت، 1(2)،76-69 https://www.sid.ir/paper/473152/fa.
داودی، اکرم؛ خوزین، علی و نادریان، آرش (1401). تمایلات سرمایه‌گذاران به بازار سرمایه: تحلیل بازگشتی، علل و عوامل آن. مجله توسعه و سرمایه، 7(2)، 212-191 https://jdc.uk.ac.ir/article_3334_8987af38324b7dd870ac2b944bd94f49.pdf.
فرهادی شریف‌آباد، محسن و دعائی، میثم (1400). مدل‌سازی تمایلات سرمایه‌گذاران با تأکید بر عوامل روان‌شناختی با استفاده روش دلفی فازی و دیمتل. پیشرفت‌های مالی و سرمایه‌گذاری، 2(5)، 144-113 https://sid.ir/paper/962026/fa.
فلاح شمس لیالستانی، میرفیض؛ قالیباف اصل، حسن و سرابی نوبخت، سمیرا (1389). بررسی اثر تجربه بر ریسک‌پذیری، بیش‌اطمینانی و رفتار توده‌وار مدیران شرکت‌های سرمایه‌گذاری در بورس اوراق بهادار تهران. بورس اوراق بهادار، 3(12)، 42-25 https://www.sid.ir/paper/484362/fa.
قاسمی، بهزاد و والمحمدی، چنگیز (1397). طراحی مدل بلوغ مدیریت دانش در کلاس جهانی بر اساس مدل تعالی: یک رویکرد آمیخته. پژوهش‌های مدیریت عمومی، 11(40)، 107-82 https://jmr.usb.ac.ir/article_4295_384286d15a243278d6fee5d273c2c12b.pdf.
قلی‌پور، آرین و افتخار، نیره (1395). ارائه مدل مدیریت استعداد به روش نظریه مبنایی (مورد مطالعه: اپراتور تلفن همراه). پژوهش‌های مدیریت عمومی، 9(34)، 90-59 https://jmr.usb.ac.ir/article_3103_de8652cca30289853874bfdb4dd4e5fd.pdf.
کنجکاومنفرد، امیررضا؛ فتحی، سعید و رنجبریان، بهرام (1394). تبیین مدل ریسک ادراک شده مشتریان خدمات سرمایه‌گذاری. کاوش‌های مدیریت بازرگانی، 14(7)، 210-191 https://bar.yazd.ac.ir/article_661_1a37855717c70175d088d3e685bd35de.pdf.
میربزرگی، سید پوریا؛ همت‌فر، محمود و جنانی، محمدحسن (1401). تبیین الگوی مناسب قدرت ریسک‌پذیری سرمایه‌گذاران بر اساس ویژگی‌های شخصیتی. پژوهش‌های حسابداری مالی و حسابرسی، 14(53)، 161-135 https://journals.iau.ir/article_691690_e09062db7f51e30f1188bbf755290153.pdf.
ملکی‌فر، سیاوش و ملکی‌فر، فرخنده (1394). آینده‌پژوهی پیشرفته. چاپ اول، نشر آینده‌پژوه، تهران.
مهرعلی تبارفیروزجاه، بهروز؛ بهارمقدم، مهدی و شمس‌الدینی، کاظم (1401). بررسی و تبین عوامل موثر بر تصمیم‌گیری‌های متفاوت سرمایه‌گذاران در ایران. مجله توسعه و سرمایه، 8(2)، 90-73.
نایب‌محسنی، شیدا؛ خلیفه سلطانی، سیداحمد و حجازی، رضوان (1400). تدوین مدل رفتاری تصمیم‌گیری سرمایه‌گذاران فردی در بازار سرمایه ایران. تحقیقات مالی، 23(4)، 652-625 https://jfr.ut.ac.ir/article_86311_45125d2a63248323f8ca9eb9d439f006.pdf.
ودیعی، محمدحسین و شکوهی‌زاده، محمود (1391). بررسی معیارهای مالی موثر بر تصمیم‌گیری سرمایه‌گذاران در بورس اوراق بهادار. مجله دانش حسابداری، 3(8)، 171-151 https://jak.uk.ac.ir/article_8_9d10d4a5099ce0e0ef2a796202ab14ee.pdf.
هیجرودی، فاطمه؛ دوستار، محمد و مرادی، محمود (1397). تحلیل تعدیلگری مدل پنج عاملی شخصیت بر تأثیرگذاری کسب اطلاعات مالی بر رفتار سرمایه‌گذاران در بورس اوراق بهادار تهران. دانش سرمایه‌گذاری، 7(25)، 59-39 https://jik.srbiau.ac.ir/article_11980_fedd311017839a 141d6e73f9a11631f7.pdf.
 
References
Aghazade, H., Esfidani, M., & Gholimotlagh, M. (2021). Developing a personal selling ethical assessment scale. Management Research in Iran, 20(3), 1-24 https://mri.modares.ac.ir/article_399_b60118fb404d773dbc25c 908db87a0c0.pdf [In Persian].
Ahmad, Z., Ibrahim, H., & Tuyon, J. (2017). Institutional investor behavioral biases: syntheses of theory and evidence. Management Research Review, 40(5), 578-603.doi:10.1108/MRR-04-2016-0091.
Bazerman, M., & Moore, D.A. (1998). Judgment in managerial decision-making. Wiley, London.
Bell, W. (2009). Foundations of Futures Studies: Human science for a new era: History, Purposes, Knowledge. Transaction Publishers, New Brunswick.
Chang, Y.Y., Faff, R.W., & Hwang, C.Y. (2009). Does investor sentiment impact global equity markets? Asian Finance Association Conference Paper.
Choudhary, S., & Ahuja, H. (2017). Behavioral finance in investment decisions: A literature review and related issues. International Journal of Engineering Technology, Management and Applied Sciences, 4(3), 174-177 doi:10.46336/ijeer.v3i3.460.
Danaeifard, H., & Eslami, A. (2010). Application of grounded theory, construction of organizational indifference. First edition, Imam Sadegh University, Tehran [In Persian].
Danaifard, H., Elwani, S.M., & Azar, A. (2018). Qualitative research methodology in management: A comprehensive approach. 6th edition, Saffar publishing, Tehran [In Persian].
Danaeifard, H., & Emami, S.M. (2007). Strategies of qualitative research: A reflection on grounded theory. Strategic Management Thought, 1(2), 69-97 https://www.sid.ir/paper/473152/fa [In Persian].
Daniel, K., Hirshleifer, D., & Subrahmanyam, A. (1998). Investor psychology and security market under-and overreactions. The Journal of Finance, 53(6), 1839-1885 https://doi.org/10.1111/0022-1082.00077.
Davoudi, A., Khozein, A., & Naderian, A. (2022). Investor inclinations towards capital market: Recursive analysis, causes, and factors. Journal of Development and Capital, 7(2), 191-212 https://jdc.uk.ac.ir/article_ 3334_8987af38324b7dd870ac2b944bd94f49.pdf [In Persian].
Dunegan, K.J. (1993). Framing, cognitive modes and image theory: Toward an understanding of a glass half full. Journal of Applied Psychology, American Psychological Association, 78(3), 491 https://doi.org/10.1037/0021-9010.78.3.491.
Falah Shams Lialestani, M., Qalibaf Asl, H., & Saraei Nobakht, S. (2011). The impact of experience on risktaking, overconfidence and herding of investment companies’ managers in. Journal of Securities Exchange, 3(12), 25-42 https://www.sid.ir/paper/484362/fa [In Persian].
Figner, B., Mackinlay, R.J., Wilkening, F., & Weber, E.U. (2009). Affective and deliberative processes in risky choice: Age differences in risk taking in the Columbia Card Task. Journal of Experimental Psychology: Learning, Memory, and Cognition, (35), 709–730 https://doi.org/10.1037/a0014983.
Figner, B., & Weber, E.U. (2011). Who takes risks when and why? Determinants of risk taking. Current Directions in Psychological Science, 20(4), 211-216 DOI: 10.1177/0963721411415790.
Farhadi Sharif Abad, M., & Doaei, M. (2022). Modeling investor tendencies with emphasis on psychological factors by fuzzy Delphi and DEMATEL methods. Advances in Finance and Investment, 2(5), 144-113 https://sid.ir/paper/962026/fa [In Persian].
Ghasemi, B., & Valmohammadi, C. (2018). Designing a maturity model of world-class knowledge management based on the excellence model: A mixed approach. Public Management Researches, 11(40), 79-107 https://jmr.usb.ac.ir/article_4295_384286d15a243278d6fee5d273c2c12b.pdf [In Persian].
Gholipor, A., & Eftekhar, N. (2017). Introducing a talent management model based on grounded theory (Case study: Telecom operator). Public Management Researches, 9(34), 59-90 https://jmr.usb.ac.ir/article_3103_ de8652cca30289853874bfdb4dd4e5fd.pdf [In Persian].
Hayward, P. (2003). Foresight in everyday life. Australian foresight institute, hawthorn. https://foresightinternational. com.au/wp-content/uploads/2015/09/AFI_Monograph_01.pdf.
Hijroudi, F., Doustar, M., & Moradi, M. (2018). Analysis of the role of five factor model of personality on the The effect of financial information acquisition on behavior of investors in the Tehran Stock Exchange. Journal of Investment Knowledge, 7(25), 39-60 https://jik.srbiau.ac.ir/article_11980_fedd311017839a141d6e73f9a11631f7.pdf [In Persian].
Hirshleifer, D., Low, A., & Teoh, S.H. (2012). Are overconfident CEOS better innovators? The Journal of Finance, 67(4), 1457-1498 https://doi.org/10.1111/j.1540-6261.2012.01753.x.
Hogarth, R.M. (1987). Judgment and choice. Wiley, Chichester.
Huangfu, G., & Zhu, L. (2014). A reexamination of the robustness of the framing effect in cognitive processing. Social Behavior and Personality: An international journal, Scientific Journal Publishers, 42(1), 37–43. DOI: https://doi.org/10.2224/sbp.2014.42.1.37.
Insworth-Land, G.T., & Jarman, B. (1992). Breakpoint and beyond : mastering the future--today. HarperBusiness. https://www.goodreads.com/en/book/show/1386841.
Jalili, E., Hoseini, K.S.H., Moshabaki, A., & Azar, A. (2019). Designing the model of implementation of integration strategy of public organizations in Iran. Management Research in Iran, 23(2), 151-181 https://mri.modares.ac.ir/ article_498_0758f1a7e2097b3ce5436e05e1f283e5.pdf [In Persian].
Jonsson, S., Söderberg, I.L., & Wilhelmsson, M. (2017). An investigation of the impact of financial literacy, risk attitude, and saving motives on the attenuation of mutual fund investors’ disposition bias. Managerial Finance, 43(3), 282–298. doi:10.1108/MF-10-2015-0269.
Kaufmann, C., & Weber, M. (2013). Sometimes less is more–The influence of information aggregation on investment decisions. Journal of Economic Behavior & Organization, 95, 20–33. DOI: 10.1016/j.jebo.2013.08.005.
Kahneman, D., & Tversky, A. (1979). Prospect theory: An analysis of decision under risk. Econometrica, 47, 263-291 https://doi.org/10.2307/1914185.
Konjkav Monfared, A.R., Fathi, S., & Ranjbarian, B. (2015). Developing a perceived risk model for customers of investment services. Journal of Business Administration Researches, 7(14), 191-210 https://bar.yazd.ac.ir/ article_661_1a37855717c70175d088d3e685bd35de.pdf [In Persian].
Kumar, S., & Goyal, N. (2015). Behavioural biases in investment decision making – A systematic literature review. Qualitative Research in Financial Markets, 7(1), 88-108. https://doi.org/10.1108/QRFM-07-2014-0022.
Lee, J. (2001). A grounded theory: Integration and internalization in ERP adoption and use. ETD collection for University of Nebraska, Lincoln. https://digitalcommons.unl.edu/dissertations/AAI3016318.
Lin, H.W. (2011). Elucidating rational investment decisions and behavioral biases: Evidence from the Taiwanese stock market. African Journal of Business Management, 5(5), 1630-1641 https://doi.org/10.5897/AJBM10.474.
Loewenstein, G.F., weber, E.U., Hsee, C.K., & Welch, N. (2001). Risk as feelings. Psychological Bulletin, 127(2), 267–286 https://doi.org/10.1037/0033-2909.127.2.267.
Malekifar, S., & Malekifar, F. (2014). Advanced Futures studies. First edition, Ayandepajooh publishing, Tehran [In Persian].
Markowitz, H. (1952). Portfolio selection. The Journal of Finance, 7(1), 77–91 https://doi.org/10.2307/2975974.
Mehralitabar Firouzjah, B., Baharmoghadam, M., & shamsadini, K. (2022). Investigation and explanation the factors afecting different decisions of investors in the Iran. Journal of Development and Capital, 8(2), 73-90 [In Persian].
Mbaluka, P., Muthama, C., & Kalunda, E. (2012). Prospect theory: Test on framing and loss aversion effects on investors decision-making process at the Nairobi securities exchange. Research Journal of Finance and Accounting, 3(9), 31–41 https://api.core.ac.uk/oai/oai:ojs.localhost:article/3148.
Mirbourzurgi, S.P., Hematfar, M., & Janani, M.H. (2022). Explaining the appropriate model of investors risk power based on personality characteristics. Financial Accounting and Auditing Research, 14(53), 135-162 https://journals.iau.ir/article_691690_e09062db7f51e30f1188bbf755290153.pdf [In Persian].
Mittal, V., & Ross, W.T. (1998). The impact of positive and negative affect and issue framing on issue interpretation and risk taking. Organizational Behavior and Human Decision Processes, 76(3), 298–324 https://doi.org/10.1006/obhd.1998.2808.
Nayebmohseni, S., Khalifehsultani, S.A., & Hejazi, R. (2022). Developing a behavioral model of individual investors’ decision-making in the Iranian capital market. Financial Research Journal, 23(4), 625-652 https://jfr.ut.ac.ir/article_86311_45125d2a63248323f8ca9eb9d439f006.pdf [In Persian].
Panahi, B., Fathi, M.R., Mahdieh Najafabadi, A., & Razi Moheb Seraj, S. (2022). Investigating the relationship between past behaviors and financial literacy with the intention to invest in the stock market with the mediating role of individual variables. Journal of Development and Capital, 7(2), 173-189 https://jdc.uk.ac.ir/article_ 3320_798335fc4c513b26a5f7dd50b63fdadb.pdf [In Persian].
Pompian, M.M. (2006). Behavioural finance and wealth management: Building optimal portfolios that account for investor biases. Hoboken, New Jersey, Usa: John Wiley & Sons, Inc., Hoboken. http://www.untag-smd.ac.id.
Ranaweera, S.S., & Kawshala, H. (2021). Influence of behavioral biases on investment decision making with moderating role of financial literacy and risk attitude: A study based on Colombo stock exchange. 12th International Conference onBusiness & Information ICBI, University of Kelaniya, Sri Lanka: ISSN 2465-6399. 80-92 doi:10.2139/ssrn.4116979.
Ricciardi, V., & Simon, H.K. (2000). What is behavioral finance? The Business, Education and Technology Journal, 2(2), 1-9 https://ssrn.com/abstract=256754.
Rocciolo, F., Gheno, A., & Brooks, C. (2019). Optimism, volatility and decision-making in stock markets. International Review of Financial Analysis, 66(5), 1-11 https://doi.org/10.1016/j.irfa.2019.05.007.
Seo, M.G., Goldfarb, B., & Barrett, L.F. (2010). Affect and the framing effect within individuals over time: Risk taking in a dynamic investment simulation. Academy of Management Journal, Academy of Management, 53(2), 411–431 doi:10.5465/AMJ.2010.49389383.
Corbin, J.M., & Strauss, A.L. (1998). Basics of qualitative research: techniques and procedures for developing grounded theory. Sage publications, California doi:https://doi.org/10.4135/9781452230153.
Strauss, A.L. (1987). Qualitative analysis for social scientists. Cambridge University Press, Cambridge [Cambridgeshire] https://worldcat.org/title/1022747532.
Society The Future World. (2004). The art of foresight. World Future Society, Bethesda. https://atumidt.dk/sites/ default/files/aktiviteter/art_of_foresight.pdf
Tayali, H.A., & Tolun, S. (2018). Dimension reduction in mean-variance portfolio optimization. Expert Systems with Applications, 92, 161-169 https://doi.org/10.1016/j.eswa.2017.09.009.
Tisheyar, M. (2010). Futures studies in strategic studies. First edition, Strategic Studies Research Institute, Tehran [In Persian].
Vadiei, M.H., & Shokouhizadeh, M. (2012). Effective criteria on investor's decision making in Tehran Stock Exchange. Journal of Accounting Knowledge, 3(8), 151-171 https://jak.uk.ac.ir/article_8_9d10d4a5099ce0e0 ef2a796202ab14ee.pdf [In Persian].
Weber, E.U., Blais. A.R., & Betz, N.E. (2002). A domain-specific risk-attitude scale: Measuring risk perceptions and risk behaviors. Journal of Behavioral Decision Making, (15), 263–290 https://doi.org/10.1002/bdm.414.
Weber, M., weber, E.U., & Nosic, A. (2013). Who takes risks when and why: determinants of changes in investor risk taking. Review of Finance, 17(3), 847–883 https://doi.org/10.1093/rof/rfs024.
Yates, J.F., Lee, J.W., & Bush, J.G. (1997). General knowledge overconfidence: Cross-national variations, response style, and reality. Organizational Behavior and Human Decision Processes, 70(2), 87–94 doi:10.1006/OBHD.1997.2696.
Yuniningsih, Y., Ismiyanti, F., Made, N.I., Mawardi, A.I., & Suhada, B. (2020). Risk taking investment as the interaction effect of loss aversion and information (Pilot test). Quality Management, 21(175), 107-112 https://repository.ummetro.ac.id/files/artikel/3801.pdf.
Journal of Development and Capital
Volume 8, Issue 2 - Serial Number 15
December 2023
Pages 247-269

Files

History

  • Receive Date: 24 June 2023
  • Revise Date: 11 August 2023
  • Accept Date: 14 August 2023

Share

How to cite

Statistics