The factors forming investor’s failure: Is financial literacy a matter? Viewing test by cognitive mapping technique

Figures & data

Figure 1. Conceptual model of study.

Figure 2. Cognitive mapping: a representation of a representation.

Source: Verstreate (1996, p. 9).

Figure 3. The structural analysis matrix and its graphs

Table 1. The three construction phases of “aggregate” cognitive map

First phaseThe identification of concepts (variables)	(a) Collect the individual perception of respondents about their portfolio failure through semi-structural interviews. (b) Clear through these interviews, different concepts, ideas, or examples related to this question. (c) Creation of a concept (variable) list to be used in the second stage.
Second phaseThe description of relationships between concepts.	(a) Every interviewee will assess the strength links between these concepts (the concepts identified during the first stage) by building a cross-impact matrix for each of them which contains only the common concepts (Figure 3).
Third phaseThe construction of the collective cognitive map	(a) Building a collective matrix in which one finds all the common concepts of the respondents and “an aggregated causal intensity.” (b) Construction of the cognitive collective map through the (MIC-MAC) program.

Table 2. Matrix table

		Total
Motricité (Σ de la i-ième ligne)	3 5 1 3	12
Dépendance (Σ de la j-ième colonne)	3 2 4 3	12

Source: Khelil and Smida (2008).

Figure 4. Classification of variables, according to the motricity and dependency criteria

Table 3. The top 13 critical failure factors in order to influence and dependence

Rank	Variable
1	Familiarity with the assets
2	Anchoring to the past failure
3	Age
4	Lower level of financial education
5	Difficulties in understanding financial concepts
6	Gender
7	Optimism
8	Lower economic education level
9	Impulsive decisions
10	Loss aversion
11	Mood
12	Portfolio size
13	Employment

Figure 5. The influences × dependences chart.

Source: Arcade et al. (1999).

Table 4. The small business failure categories

Failure categories	Associated factors
Cognitive biases^*	Familiarity Anchoring Optimism Loss aversion
Financial literacy^*	Difficulties in understanding the financial concepts; Lower level of financial education; Lower level of economic education level;
Individuals differences^*	Age Gender Employment
Portfolio composition^*	lower rate of portfolio diversification. Portfolio size
Individual investor behavior^**	Impulsive decisions Mood;

* Dimension of motrice variables.

** Dimension of dependent variables.

Figure 6. Directs influences’ graph.

Figure 7. Direct dependency influence plan.

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