Impact of Behavioral Biases on Firm Performance: Mediating Role of Entrepreneurial Innovations

Baig, S. A., Zia-ur-Rehman, M., Jamil, K., Hashim, M., & Iqbal, N. (2019). Impact of Behavioral Biases on firm performance: Mediating Role of Entrepreneurial Innovations. Journal of Managerial Sciences, 13(2).

12 Pages Posted: 16 Dec 2019

See all articles by Sajjad Baig

Sajjad Baig

National Textile University

Dr. Muhammad Zia ur Rehman

National Textile University, Faisalabad; International Islamic University, Islamabad

Khalid Jamil

affiliation not provided to SSRN

Muhammad Hashim

affiliation not provided to SSRN

Nayab Iqbal

affiliation not provided to SSRN

Date Written: 2019

Abstract

Behavioral finance provides a better understanding and elaborates how attitude and cognitive errors affect investors as well as entrepreneurs or other decision makers. The primary objective of this study is to find those behavioral biases which impact the firm’s performance and managerial, financial decision-making process through the mediating role of entrepreneurial innovations. This study predominantly focused on four biases that entrepreneurs apparently exhibit in their decisions. The survey questionnaire technique was used to collect data for research and analysis; data were collected from 109 respondents which include entrepreneurs and managers from non-financial firms of Pakistan. SEM-AMOS 21 was used to analyze the structural model. The finding shows that innovative organizations often predict the low tendency of overconfidence and usually are risk-averse in their financial decision. But the current study shows that innovative organizations can enhance the profitable performance of the firm with behavioural biases.

Keywords: entrepreneurial innovations, firm performance, cognitive biases, financial innovations, innovative organizational culture

JEL Classification: L25

Suggested Citation

Baig, Sajjad and Zia ur Rehman, Muhammad and Jamil, Khalid and Hashim, Muhammad and Iqbal, Nayab, Impact of Behavioral Biases on Firm Performance: Mediating Role of Entrepreneurial Innovations (2019). Baig, S. A., Zia-ur-Rehman, M., Jamil, K., Hashim, M., & Iqbal, N. (2019). Impact of Behavioral Biases on firm performance: Mediating Role of Entrepreneurial Innovations. Journal of Managerial Sciences, 13(2)., Available at SSRN: https://ssrn.com/abstract=3495406

Sajjad Baig

National Textile University ( email )

National Textile University
Faisalabad, Punjab 38000
Pakistan

Muhammad Zia ur Rehman (Contact Author)

National Textile University, Faisalabad ( email )

Sheikhupura Road, Faisalabad
Faisalabad, Punjab 38000
Pakistan

International Islamic University, Islamabad ( email )

Islamabad, 44000
Pakistan

Khalid Jamil

affiliation not provided to SSRN

Muhammad Hashim

affiliation not provided to SSRN

Nayab Iqbal

affiliation not provided to SSRN

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
40
Abstract Views
269
PlumX Metrics