Does SME’s financing decisions follow pecking order pattern? The role of financial literacy, risk preference, and home bias in SME financing decisions

References

• Agarwal, N., Raman, T., Sharma, V. A., & Jain, V. (2016). Behaviour biases affecting investor attitude. The Social Sciences, 11(14), 3643–17. https://medwelljournals.com/abstract/?doi=sscience.2016.3643.3647
   Google Scholar
• Ajzen, I. (1991). The theory of planned behavior. Organizational behavior and human decision processes, 50(2), 179–211. https://doi.org/10.1016/0749-5978(91)90020-T
   Google Scholar
• Aren, S., & Zengin, A. N. (2016, October). Influence of financial literacy and risk perception on choice of investment. Procedia - Social and Behavioral Sciences, 235, 656–663. https://doi.org/10.1016/j.sbspro.2016.11.047
   Google Scholar
• Asaad, C. T. (2015). Financial literacy and financial behavior: assessing knowledge and confidence. Financial Services Review, 24(2), 101-118. https://scholar.google.com/scholar?cluster=4634360060103136030&hl=en&as_sdt=0,5
   Google Scholar
• Barber, B. M., & Odean, T. (2001). Boy will be boys: Gender, overconfidence, and common stock investment. Quarterly Journal of Economics, 116(1), 261–292. https://doi.org/10.1162/003355301556400
   Google Scholar
• Barber, B. M., & Odean, T. (2008). All that glitters: The effect of attention and news on the buying behavior of individual and institutional investors. The Review of Financial Studies, 21(2), 785–818. https://doi.org/10.1002/9781118467411.ch7
   Google Scholar
• Barber, B. M., & Odean, T. (2011). The behavior of individual investors. In G. M. Constantinides, M. Harris, & R. M. Stulz (eds.), Handbook of Economics of Finance, Vol. 2B (pp. 1533–1570). Asset Pricing, Oxford, UK: North-Holland. https://doi.org/10.1016/B978-0-44-459406-8.00022-6
   Google Scholar
• Barbosa, S. D., Gerhardt, M. W., & Kickul, J. R. (2007). The role of cognitive style and risk preference on entrepreneurial self-efficacy and entrepreneurial intentions. Journal of Leadership & Organizational Studies, 13(4), 86–104. https://doi.org/10.1177/10717919070130041001
   Google Scholar
• Bijmolt, T. H., Van Heerde, H. J., & Pieters, R. G. (2005). New empirical generalizations on the determinants of price elasticity. Journal of marketing research, 42(2), 141-156. https://doi.org/10.1509/jmkr.42.2.141.62296
   Google Scholar
• Bodie, Z., Kane, A., & Marcus, A. J. (2014). Investments. McGraw-Hill Education.
   Google Scholar
• Bransch, F. (2020). Financial literacy and home bias in household investments. SSRN Electronic Journal, 1–34. https://doi.org/10.2139/ssrn.3596746
   Google Scholar
• Chen, H., & Volpe, R. P. (1998). An analysis of personal financial literacy among college students. Financial Services Review, 7(2), 107–128. https://doi.org/10.1016/S1057-0810(99)80006-7
   Google Scholar
• Chen, H., & Volpe, R. P. (2002). Gender difference in personal financial literacy among college students. Financial Services Review, 11, 289–307. https://doi.org/10.5897/AJBM10.1267
   Google Scholar
• Coval, J. D., & Moskowitz, T. J. (1999). Home bias at home: local equity preference in domestic portfolios. The Journal of Finance, LIV(6), 54(6), 2045–2073. https://doi.org/10.1111/0022-1082.00181
   Google Scholar
• Delic, A., Peterka, S. O., & Kurtovic, I. (2016). Is there a relationship between financial literacy, capital structure and competitiveness of SMEs? Ekonomski Vjesnik. 1, 37–50.
   Google Scholar
• Dervishaj, B. (2018). Psychological biases, main factors of financial behaviour - A literature review. European Journal of Natural Sciences and Medicine, 1(2), 25. https://doi.org/10.26417/ejnm.v1i2.p25-35
   Google Scholar
• Dlugosch, D., Horn, K., & Wang, M. (2014). Behavioral determinants of home bias - theory and experiment. Working Papers in Economics and Statistics No. 2014-11. University of Innsbruck, Research Platform Empirical and Experimental Economics (eeecon), Innsbruck. https://www2.uibk.ac.at/downloads/c4041030/wpaper/2014-11.pdf
   Google Scholar
• Dohmen, T., Falk, A., Huffman, D., Wagner, G. G., Schupp, J., & Wagner, G. G. (2011, June). Individual risk attitudes: measurement, determinants, and behavioral consequences. Journal of the European Economic Association, 9(3), 522–550. https://doi.org/10.1111/j.1542-4774.2011.01015.x
   Google Scholar
• Ellison, G., & Fudenberg, D. (1993). Rules of thumb for social learning. Journal of Political Economy, 101(4), 612–643. https://doi.org/10.1086/261890
   Google Scholar
• Eniola, A. A., & Entebang, H. (2017). SME managers and financial literacy. Global Business Review, 18(3), 559–576. https://doi.org/10.1177/0972150917692063
   Google Scholar
• Fourati, H., & Affes, H. (2013 November). The capital structure of business Start-Up: Is there a pecking order theory or a reversed pecking order? Technology and investment. 4, 244–254. http://dx.doi.org/10.4236/ti.2013.44029
   Google Scholar
• Gaudecker, H. M. V. (2015). How does household portfolio diversification vary with financial literacy and financial advice?. The Journal of Finance., 70(2), 489-507. https://doi.org/10.1111/jofi.12231
   Google Scholar
• Guiso, L., & Jappelli, T. (2006). Information acquisition and portfolio performance. CeRP Working Paper 52/06. Center For Research on Pensions and Welfare Policies. https://www.cerp.carloalberto.org/wp-content/uploads/2008/12/wp_52.pdf.
   Google Scholar
• Gustafsson, C., & Omark, L. (2015). Financial literacy’s effect on financial risk tolerance -A quantitative study on whether financial literacy has an increasing or decreasing impact on financial risk tolerance. http://www.diva-portal.org/smash/get/diva2:826787/FULLTEXT01.pdf
   Google Scholar
• Hastuti, P. C., Thoyib, A., Troena, E. A., & Setiawan, M. (2015, September). The minang entrepreneur characteristic. Procedia - Social and Behavioral Sciences, 211, 819–826. https://doi.org/10.1016/j.sbspro.2015.11.108
   Google Scholar
• Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior agency cost and ownership structure. Journal of Financial Economics, 3(4), 305–360. https://doi.org/10.1016/0304-405X(76)
   Google Scholar
• Karlsson, A., & Nordén, L. (2007). Home sweet home: Home bias and international diversification among individual investors. Journal of Banking and Finance, 31(2), 317–333. https://doi.org/10.1016/j.jbankfin.2006.04.005
   Google Scholar
• Karyadi, U., & Rizki, L. T. (2018). Reconceptualization of empowerment principles by banking in supporting small and medium enterprises according to law No. 20 of 2008 concerning SMEs. Lex Publica, 5(1), 1–7. https://journal.appthi.org/index.php/lexpublica/article/view/89
   Google Scholar
• Koenen, T. B., Lusardi, A., Alessie, R., & Maarten, V. R. (2017). How financially literate are women? An overview and new insights. The Journal of Consumer Affairs, 51(2), 255–282. https://doi.org/10.1111/joca.12121
   Google Scholar
• Kumar, S., Watung, C., Eunike, N. J., & Luinata, L. (2017). The influence of financial literacy towards financial behavior and its implication on financial decisions: A survey of President University students in Cikarang - Bekasi. Firm Journal of Management Studies, 2(1), 169–179. http://e-journal.president.ac.id/presunivojs/index.php/FIRM-JOURNAL/article/view/158/87
   Google Scholar
• Luigi, P., & Sorin, V. (2009). A review of the capital structure theories. Annals of Faculty of Economics, 3(1), 315-320. https://scholar.google.com/scholar?cluster=18161674235666143914&hl=en&as_sdt=0,5
   Google Scholar
• Lusardi, A., Mitchell, O. S., & Curto, V. (2010). Financial literacy among the young. Journal of Consumer Affairs, 44(2), 358–380. https://doi.org/10.1111/j.1745-6606.2010.01173.x
   Google Scholar
• Lusardi, A., & Mitchell, O. S. (2014). The economic importance of financial literacy: Theory and evidence. American Economic Journal: Journal of Economic Literature, 52(1), 5-44. http://dx.doi.org/10.1257/jel.52.1.5
   Google Scholar
• Lütje, T., & Menkhoff, L. (2007). What drives home bias? Evidence from fund managers’ views. International Journal of Finance & Economics, 12(1), 21–35. https://doi.org/10.1002/ijfe.309
   Google Scholar
• Marchand, M. (2012). Behavioral biases in financial decision making. Bachelor Theses Finance, Vol. 8200, pp. 1-28. Tilburg University. http://arno.uvt.nl/show.cgi?fid=129741.
   Google Scholar
• Mouna, Amari, and Jarboui Anis. “Financial literacy and decision making: An overview from Tunisia.” International Journal of Information, Business and Management 5.4 (2013). 62-73. https://scholar.google.com/scholar?cluster=8668928663898714246&hl=en&as_sdt=0,5
   Google Scholar
• Mudzingiri, C., Mwamba, J. W. M., Keyser, J. N., & Poon, W. C. (2018). Financial behavior, confidence, risk preferences and financial literacy of university students. Cogent Economics & Finance, 6(1), 1–25. https://doi.org/10.1080/23322039.2018.1512366
   Google Scholar
• Muradoglu, Y. G., Levis, M., & Vasileva, K. (2009). “Near-Home Bias” in foreign direct investments. Ssrn, 1–33. https://doi.org/10.2139/ssrn.1359168
   Google Scholar
• Musa, M., & Simonov, A. (2006). Hedging, familiarity and portfolio choice. The Review of Financial Studies, 19(2), 633-685. https://doi.org/10.1093/rfs/hhj013
   Google Scholar
• Myers, S. C. (1984). The Capital Structure Puzzle. The Journal of Finance, 39(3), 575. https://doi.org/10.2307/2327916
   Google Scholar
• Nguyen, N., & Luu, N. T. H. (2013). Determinants of financing pattern and access to formal -informal credit: The case of small and medium sized enterprises in Viet Nam. Journal of Management Research, 5(2), 240–259. https://doi.org/10.5296/jmr.v5i2.3266
   Google Scholar
• Nguyen, A. T. L., Van Nguyen, D., & Nguyen, N. H. (2022). The relationship between financial decisions and equity risk. Heliyon, 8(8), e10036. https://doi.org/10.1016/j.heliyon.2022.e10036
   Google Scholar
• Nofsinger, J. R. (2001). The impact of public information on investors. Journal of Banking & Finance, 25(7), 1339–1366. https://doi.org/10.1016/S0378-4266(00)00133-3
   Google Scholar
• Olakitan, O. O., & Ayobami, A. P. (2011). An Investigation of Personality on Entrepreneurial Success. Journal of Emerging Trend in Economics and Management Sciences, 2(2), 95–103. https://hdl.handle.net/10520/EJC133893
   Google Scholar
• Pompian, M. M. (2006). Behavioral finance and wealth management – How to build optimal portfolios that account for investor biases. Financial Markets and Portfolio Management, 21. https://doi.org/10.1007/s11408-007-0065-3
   Google Scholar
• Qureshi, S. A., Rehaman, K. U., & Hunjra, A. I. (2012). Factors affecting investment decision making of equity fund manager. Wulfenia Journal, 19(10), 1–13. https://doi.org/10.17512/pjms.2016.14.2.05
   Google Scholar
• Raut, R. K., Das, N., & Kumar, R. (2018). Extending the theory of planned behaviour: impact of past behavioural biases on the investment decision of Indian investors. Asian Journal of Business and Accounting, 11(1), 265–292. https://doi.org/10.22452/ajba.vol11no1.9
   Google Scholar
• Ricciardi, V., & Simon, H. K. (2000). What is behavioral finance?. Business, Education & Technology Journal, 2(2), 1-9. https://ssrn.com/abstract=256754.
   Google Scholar
• Rossi, P. E. (2014). Even the rich can make themselves poor: A critical examination of IV methods in marketing applications. Marketing Science, 33(5), 655-672. https://doi.org/10.1287/mksc.2014.0860
   Google Scholar
• Sanyal, P., & Mann, C. L. (2010). The financial structure of startup firms: The role of assets, Information, and Entrepreneur Characteristics.
   Google Scholar
• Shefrin, H. (2000). Recent developments in behavioral finance. The Journal of Wealth Management, 3(1), 25–37. https://doi.org/10.3905/jwm.2000.320376
   Google Scholar
• Shusha, A. A. (2017). Does financial literacy moderate the relationship among demographic characteristics and financial risk tolerance? Evidence from Egypt. Australasian Accounting, Business and Finance Journal, 11(3), 67–86. https://doi.org/10.14453/aabfj.v11i3.6
   Google Scholar
• Solvic, P. (1969). Analyzing the expert judge: A study of a stockbroker’s decision process. Journal of Applied Psychology, 27(4), 255–263. https://doi.org/10.1037/h0027773
   Google Scholar
• Sutanto, O., & Nurrachman, N. (2018). Makna Kewirausahaan Pada Etnis Jawa, Minang, Dan Tionghoa: Sebuah studi representasi sosial. Jurnal Psikologi Ulayat, 5(1), 86. https://doi.org/10.24854/jpu73
   Google Scholar
• Tversky, A., & Kahneman, D. (1974). Judgment under Uncertainty: Heuristics and Biases: Biases in judgments reveal some heuristics of thinking under uncertainty. science, 185(4157), 1124-1131. https://doi.org/10.1126/science.185.4157.1124
   Google Scholar
• Ullah, S. (2018). Corporate environmental disclosure and earnings quality: Evidence from Malaysian firms. Arthatama, 2(2), 64–84. https://arthatamajournal.co.id/index.php/home/article/view/24
   Google Scholar
• Ulwan, A. (2021). The role of young entrepreneurs in labor absorptions and its implications to family economic resilience. Research Horizon, 1(1), 16–27. https://doi.org/10.54518/rh.1.1.2021.16-2
   Google Scholar
• Vries, A. D., Erasmus, P. D., & Gerber, C. (2017). The familiar versus the unfamiliar: Familiarity bias amongst individual investors. Independent Research Journal in the Management Sciences, 171 , 1–10. https://hdl.handle.net/10520/EJC-5526a7898
   Google Scholar
• Weber, E. U., & Hsee, C. (1998). Cross-cultural differences in risk perception, but cross-cultural similarities in attitudes towards perceived risk. Management Science, 44(9), 1205–1217. https://doi.org/10.1287/mnsc.44.9.1205
   Google Scholar
• Wen, F., He, Z., & Chen, X. (2014). Investors’ risk preference characteristics and conditional skewness. In Mathematical Problems in Engineering (pp. 2014).
   Google Scholar
• West, T., de Zwaan, L., & Johnson, D. (2020). Boosting Women: Why They Decline to Provide Responses to Financial Literacy Questions. https://dx.doi.org/10.2139/ssrn.3668705
   Google Scholar
• Wooldridge, J. M. (2010). Econometric analysis of cross section and panel data. Cambridge: MIT Press.
   Google Scholar
• Xiao, L. (2011, April). financing high-tech SMEs in China: A three-stage model of business development. Entrepreneurship and Regional Development, 23(3–4), 217–234. https://doi.org/10.1080/08985620903233937
   Google Scholar
• Yao, R., Sharpe, D. L., & Wang, F. (2011). Decomposing the age effect on risk tolerance. Journal of Socio-Economics, 40(6), 879–887. https://doi.org/10.1016/j.socec.2011.08.023
   Google Scholar
• Zhu, M. (2017). A Study on the Factors Affecting the financing of High-Tech SMEs. Asian Social Science, 13(8), 121–128. https://doi.org/10.5539/ass.v13n8p121
   Google Scholar
• Zyphur, M. J., Narayanan, J., Arvey, R. D., & Alexander, G. J. (2009). The genetics of economic risk preferences. Journal of Behavioral Decision Making, 22(4), 367–377. https://doi.org/10.1002/bdm.643
   Google Scholar