Abstract
Investment decisions have great importance in different sectors of various countries and these decisions are the basis on which the outcomes of the investments are based. However, there might be certain factors that might lead to the incorrect long term and short term investment decisions. In this regard, the current study has been conducted with the core motive to explore the impact casted by the environment and potential factors i.e. salience and overconfidence on the long term investment decisions for accommodation business along with the moderation of a variable i.e. financial literacy. To fulfill this objective, the researcher has collected data from the investors of accommodation businesses in Thailand. The collected data has been subjected to different statistical techniques and tools for analysis purpose and the results have been obtained. The results obtained by the analysis of the collected data indicate that salience and overconfidence have significant impact on the long term investment decision. In addition, the moderating role of financial literacy has also been found as significant in the study. The results suggest that the investors of the accommodation business must consider the aspects of salience and overconfidence before taking any long term investment decision to avoid failure of the investment decision.
Highlights
Investment decisions are made by the representatives or top management of a firm or an organization as discussed in the conventional theories regarding finance
The current study has been conducted with the core motive to explore the impact casted by the environment and potential factors i.e. salience and overconfidence on the long term investment decisions for accommodation business along with the moderation of a variable i.e. financial literacy
The results obtained by the analysis of the collected data indicate that salience and overconfidence have significant impact on the long term investment decision
Summary
Investment decisions are made by the representatives or top management of a firm or an organization as discussed in the conventional theories regarding finance. The investors do www.psychologyandeducation.net not invest in this way and act rationally ignoring all the benefits associated with diversification (Ahearne, Griever, & Warnock, 2004; Chan, Covrig, & Ng, 2005). This might be due to various reasons such as salience bias or familiarity effect. Its importance is based on the fact that the investment decision makers face this issue more as compared to others (Hirshleifer, 2001; Yalcin et al, 2016) Another factor that might impact the decision making process of investment is over confidence in context of the investment returns. The financial literacy might play role in the precision of the financial or investment decision making process
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