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Propensity toward indebtedness: evidence from Malaysia

Propensity toward indebtedness: evidence from Malaysia PurposeThe purpose of this paper is to develop a model for studying the propensity towards indebtedness in Malaysia using behavioural factors.Design/methodology/approachA self-administered questionnaire was distributed among Malaysians who work in Klang Valley, Kuala Lumpur. The questionnaire contained several demographic variables and four behavioural factors: financial literacy, risk perception, materialism and emotions. A total of 201 completed questionnaires were received and the data were tested using structural equation modelling with partial least squares.FindingsThis study found that emotion and materialism are statistically significant for a propensity towards indebtedness, while financial literacy and risk perceptions are insignificant for a propensity towards indebtedness.Originality/valueThe results of this study would be useful in helping design better models for credit offerings and addressing credit problems in the long run. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Behavioral Finance Emerald Publishing

Propensity toward indebtedness: evidence from Malaysia

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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
1940-5979
DOI
10.1108/RBF-05-2017-0046
Publisher site
See Article on Publisher Site

Abstract

PurposeThe purpose of this paper is to develop a model for studying the propensity towards indebtedness in Malaysia using behavioural factors.Design/methodology/approachA self-administered questionnaire was distributed among Malaysians who work in Klang Valley, Kuala Lumpur. The questionnaire contained several demographic variables and four behavioural factors: financial literacy, risk perception, materialism and emotions. A total of 201 completed questionnaires were received and the data were tested using structural equation modelling with partial least squares.FindingsThis study found that emotion and materialism are statistically significant for a propensity towards indebtedness, while financial literacy and risk perceptions are insignificant for a propensity towards indebtedness.Originality/valueThe results of this study would be useful in helping design better models for credit offerings and addressing credit problems in the long run.

Journal

Review of Behavioral FinanceEmerald Publishing

Published: Jun 28, 2019

References