Volume 19 No. 3, December 2020
ARTICLE INFO
Article History:
Received: 18 May 2020
Accepted: 18 November 2020
Available online: 30 December 2020
MANAGEMENT & ACCOUNTING REVIEW, VOLUME 19 NO 3, DECEMBER 2020
The Impact of Cognitive Factors on Individuals’ Financial Decisions
Marhanum Che Mohd Salleha, Mohammad Abdul Matin Chowdhurya, Ahmad Fawwaz Bin Mohd Nasarudina and Ririn Tri Ratnasarib
aInternational Islamic University Malaysia
bUniversitas Airlangga, Indonesia
ABSTRACT
The objective of this paper is to examine the effect of cognitive factors which are financial knowledge, herding behaviour and financial planning towards individuals’ financial decisions. A total of 173 survey data were collected from university staff consisting of administrative and academic members. This research adopted a quantitative methodology for data collection as well as data analysis. Multiple regression analysis was used to examine the effect of cognitive factors towards the dependent variable which is financial decision. Results indicate that only two cognitive variables which are financial knowledge and financial planning have a significant effect toward financial decisions. Herding behaviour was found to insignificantly effect the individual financial decision process. Results of this research would be of significance to proof that other than external factors, internal factors which are cognitive elements are crucial in influencing individual financial decisions.
KEYWORDS: Financial planning, herding behaviour, financial knowledge, financial decision, cognitive factor
KEYWORDS: Financial planning, herding behaviour, financial knowledge, financial decision, cognitive factor