Abstract
Investment behavior of an investor depends on his/her risk perception and risk attitude. This paper attempts to explore that how the perception of an investor who is also the employee of that organization differs from other investors. Does he/she perceives risk similarly as other common investors or his relationship with the organization as an employee has any impact his/her risk perception, attitude and investment behavior. This research study is conceptual in nature and mainly based on previous literature findings and evidences. Findings of this study suggested that employees risk perception is directly related with investment behavior and there is strong relationship between them. This can help the management to make special offers of shares to employees, this will further strength the bond of employees with the organization.
Highlights
Study of risk perception and its impact on investment behavior is one of the core investigation issues of behavioral finance research
After a careful examination of the literature we found that the previous empirical literature was focused on the relationship between risk perception, attitude towards risk and investment decision of individual investors; it is obvious that investment decision largely depends on risk perception and risk attitude
Employees Investment Behavior: Decision of Employee Investment Behavior depends on the following constructs as frequently in behavioral finance literature (Rayan and Zaichkowsky, 2010): Investor Confidence Time horizon Risk Attitude Control
Summary
Study of risk perception and its impact on investment behavior is one of the core investigation issues of behavioral finance research. His/her decision to invest or not will depend on his risk/return expectations and his/her risk attitude. Modern researchers found through experiments that there are significant differences in the level of risk perception as well as returns expectations that explain inconsistent risk taking behavior. Very few researchers tried to explore the sentiment of an employ as an investor, a couple of studies attempted to explore the risk perception attitude of an employee but they left the exploration of link between risk perception and investment behavior of an employee of the company for future research. This study sheds light on the loyalty aspect of employees towards their corporation while making investment decision. Investment in their own corporation further strengthen bond with their own organization. It will help to make stronger the link between employees and organization and help the organization to raise equity at the same time
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