Extracting the Customer's Behavioral Finance Model in Iran’s Development Banking using multi-group modeling technique (Case Study: Bank of Industry and Mine)

Subject Areas : Journal of Investment Knowledge

Mohammad Hossein Lotfolah Hamadani ¹ , Mohsen Dastgir ² , seyed ali heidari ³

1 - PhD student of governmental management-financial management, Department of Management, Isfahan (Khorasgan) Branch, Islamic Azad University, Isfahan, Iran,
2 - Professor of Accounting, Isfahan (Khorasgan) Branch,Islamic Azad University, Isfahan, Iran
3 - Visiting Professor, financial management department, faculty of financial sciences, Kharazmi University, Tehran, Iran

Received: 2019-09-28 Accepted : 2019-12-03 Published : 2020-11-21

Keywords: Customer, Behavioral Finance, Multi-group modeling,

Abstract :

Behavioral finance theory, which is generally interpreted as the application of psychology in financial science, has challenged the fundamental principle of neoclassical economics and tries to identify the human psychological phenomena in the whole market and at the personal level. The aim of the current research is to extract behavioral finance model of customers in development banks of Iran using multi-group modeling technique in Bank of Industry and Mine. To this purpose, the current research was conducted in two stages. In the first stage, or qualitative part, a total of 20 persons of experts were selected to identify research variables. In the second stage, or qualitative part, the statistical data in two periods of time: 2012-2014 and 2015-2017 were collected and assessed using multi-group modeling technique. The obtained results showed that bank factors and customer factors in different periods may not have significant effect on financial behaviors of customers, but intervening variable (environmental factors), highly affect the financial behavior of customers, indicating that the financial behavior of customers in Iran is more under the influence of macroeconomics and its policies. Based on the results of this study, customers pay more attention to the key factors such as economic growth rate, per capita income and interest rate in order to interact more with the development bank which is receiving and paying the facilities and credits. Thus, this banks should look for some methods to increase the attraction of resources and decrease the credit risk under the conditions of economic fluctuations.

References:

• پمپین، میشل ام. (1394)، دانش مالی رفتاری و مدیریت دارایی، ترجمه احمد بدری، انتشارات کیهان.


• خیری زاده، محمد. عبدی، مصطفی. (1395)، بررسی رفتار مالی مشتریان با استفاده از الگوی فرانظری تغییر، چهارمین کنفرانس بین­المللی اقتصاد مدیریت حسابداری با رویکرد ارزش آفرینی.


• گرجی زاده، داود. خانمحمدی، محمد حامد(1396)، بررسی اثرات عوامل مالی رفتاری بر تصمیمات سرمایه گذاران انفرادی، دانشگاه آزاد اسلامی دماوند،گروه حسابداری.


• میلادیان، حسین. ضیایی پور، امیر. (1394)، تأثیر سواد مالی و هوش هیجانی بر رفتار مالی سرمایه گذاران در بورس اوراق بهادار تهران، پایان نامه کارشناسی ارشد، دانشگاه آزاد اسلامی ‌واحد مرودشت.


• Antweiler, W. & Frank, MZ. (2006). Do U.S. stock markets typically overact to corporate news stories? Working paper, University of British Columbia.


• Adaka, T. (2010). Effects of Mobile banking on selected macroeconomic factors in Kenya.


• Audzeyeva, A., summers, B. &Schenk-Hoppé, K.R. (2012). forecasting customer behaviour in a multi-service financial organisation: A profitability perspective, International Journal of Forecasting, Vol. 28, pp. 507-518.


• Balduzzi, P., Brancati, E. & Schiantarelli, F. (2017). Financial markets, bank`s cost of funding, and firm`s decisions: Lessons from two crises, Journal of Financial Intermediation.


• Bedman, N. (2013), SME bank selection and patronage behavior in the Ghanaian banking, Industry, Management Research Review,Vol. 36, Iss. 11, pp. 1062-1080.


• Berger, A. & Bouwman, C. (2017). Bank liquidity creation, monetary policy and financial crises, Journal of Financial Stability, Vol. 30, pp. 139-155.


• Birnberg, J.G. (2011). A proposed framework for behavioral accounting research, Behavioral Research in Accounting, Vol. 23, pp. 1-43.


• Charles R. Crowell D., Chris Anderson Dawn M. Abel, Sergio Joseph P.; (2013). Task clarification, performance feedback, and social praise: Procedures for improving the customer service of bank tellers; Journal of Applied Behavior Analysis, Vol. 21, No. 1, pp. 65-67.


• Cohen,M.D, (2004), Exploiting response models-optimizing cross-sell and upsell opportunities in banking , Information Systems ,volume 29. 327–341.


• Dew, J. & Xiao, J. (2011). The financial management behavior scale: development and validation, Association for Financial Counseling and Planning Education, pp. 43-59.


• Deku, S Y., Kara, A., Zhou, Y., (2019). Securitization, bank behavior and financial stability: A systematic review of the recent empirical literature. International Review of Financial Analysis, Vol. 61(C), pp. 245-254.


• Donaldson, R.G. & Kim, H.Y. (1993). Price barriers in the Dow Jones industrial average, The Journal of Financial and Quantitative Analysis, Vol. 28, pp. 313-330.


• Frydman, C. & Camerer, CF. (2016). The psychology and neuroscience of financial decision making, Trends in cognitive sciences.


• Flynn, S.I. (2008). Behavioral Finance, Research Starters Business, pp. 11-13.


• Guo, X. & Duff, A. & Hair, M.(2008), service quality measurement in the chinses corporate banking market, international journal of bank marketing,vol26,Iss5,pp305-327.


• Ijevleva, K. & Arefjevs, I. (2014). Analysis of the aggregate financial behavior of customers using the trans theoretical model of change, Procedia-Social and Behavioral Sciences, Vol. 156, pp. 435-438.


• Irena, R., Braicu, E.I., En-Nia, A., Heinrich, M. & Mertens, P.R. (2016). Y-box protein-1/p18 as novel serum marker for ovarian cancer diagnosis: A study by the Tumor Bank Ovarian Cancer (TOC), Cytokine, Vol. 85, pp. 157-164.


• Kontot, K., Hamali, J. & Abdullah, F. (2016). Determining Factors of Customers’ Preferences: A Case of Deposit Products in Islamic Banking, Social and Behavioral Sciences, Vol. 224, pp. 167-175.


• Kosak, M., Li, S., Loncarski, I. & Marinc, M. (2014). Quality of bank capital and bank lending Behavior during the global financial crisis, International Review of Financial Analysis, Vol. 37, pp. 168-183.


• Lee, C., Lee, C., Zeng, J. & Hsu, Y. (2017). Peer bank behavior, economic policy uncertainty, and leverage decision of financial institutions, Journal of Financial Stability, Vol. 30, pp. 79-91.


• Louhichi, A. & Boujelbene, Y. (2017). Bank capital, lending and financing behavior of dual banking systems, Journal of Multinational Financial Management, Vol. 41, pp. 61-79.


• Lusardi, A. & Mitchell, O. S. (2014). The economic importance of financial literacy: theory and evidence, Journal of Economic Literature, 52 (1): 5-44.


• Micco, A. & Panizza, U. (2006). Bank ownership and lending behavior. Economics Letters, Vol. 93, pp. 248-254.


• Nicholson, N., O’Creevy, M., Willman, P. & Soane, E. (2001). Knowing the Risks; Theory and Practice in Financial Market Trading, ESRC grant No. L211252056.


• Niraula, S. (2012). HAMK, Behavioral Finance during Financial Crisis in a banking company, HAMK University of applied sciences.


• Oliveira, M., Kadapakkam, P. & Beyhaghi, M. (2017). Effects of customer financial distress on supplier capital structure, Journal of Corporate Finance, Vol. 42, pp. 131-149.


• Rosenblatt, J., Laroche, M., Hochstein, A., McTavish, R. and Sheehan, M. (1988), Commercial banking in Canada: a study of the selection criteria and service expectations of treasury officers, International Journal of Bank Marketing, Vol. 6 No. 4, pp. 19-30.


• Sánchez, M., López, F. & Lacambra, J. (2017). How do neighboring peer companies influence SMEs' financial behavior? , Economic Modelling.


• Siddique, N.E.A. (2012). Bank Selection Influencing Factors: A Study on Customer Preferences with Reference to Rajshahi City, Asian Business Review, Vol. 1, No. 1.


• Woodyard, A. & Robb, C. (2012). Financial Knowledge and the Gender Gap, Journal of Financial Therapy, Vol. 3, Issue 1