The Impact of Behavioral Biases on Herding Behavior of Investors in Islamic Financial Products

Frontiers in Psychology

Ayman Abu-Rumman¹  Israr Ahmad²  Alla Davidyants³  Shabra Khalid Mehmood⁴  Arfan Shahzad⁵  Sajid Mohy Ul Din⁶ 

[1] Business School, Al-Ahliyya Amman University, Al-Salt, Jordan;College of Business (COB), Universiti Utara Malaysia, Changlun, Malaysia;Department of Propaedeutics of Dental Diseases, I. M. Sechenov First Moscow State Medical University (Sechenov University), Zelenograd, Russia;Lahore Business School, University of Lahore, Lahore, Pakistan;Othman Yeop Abdullah Graduate School of Business (OYAGSB), Universiti Utara Malaysia, Changlun, Malaysia;School of Economics, Finance, and Banking (SEFB), Universiti Utara Malaysia, Changlun, Malaysia;

关键词: illusion of control;    self-attribution bias;    Islamic financial products;    behavioral biases;    herding;    Islamic (shari’ah) financial products;   

DOI  :  10.3389/fpsyg.2020.600570

来源: Frontiers

【 摘 要 】

The study aimed to investigate the impact of behavioral biases on herding for Islamic financial products with the mediation of shariah literacy. An adopted questionnaire from several published studies was used to collect data. The data were collected from 410 respondents and were analyzed with SmartPLS. The results for the direct impact showed that self-attribution, illusion of control, and information availability have a positive and significant impact on herding for Islamic financial products while shariah literacy showed an insignificant impact on herding. The results for mediation showed that previously significant and positive impact turned to insignificant when shariah literacy was introduced as mediating variable between the illusion of control, self-attribution, information availability, and herding. From a theoretical perspective, this study would contribute to the existing body of knowledge of financial decision making from shariah literacy point-out. On the other hand, the findings of this study may be useful for investors to avoid herding in the Islamic financial markets. The authors synthesize the contribution made by behavioral finance studies in extending the knowledge of herding behavior in Islamic financial products with a mediating role of shariah literacy. The key limitation of the study includes data that were collected from three districts of Punjab, Pakistan.

【 授权许可】

CC BY