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Factors Explaining the Market Discipline of Sharia Mutual Funds from a Behavioural Finance Perspective: A Theoretical Approach

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  • Umi Widyastuti
  • Erie Febrian
  • Sutisna
  • Tettet Fitrijanti

Abstract

Purpose: This paper aims to develop propositions about the antecedents of market discipline of Sharia mutual funds. Design/Methodology/Approach: This paper elaborates some scholars, which have applied Theory of Planned Behaviour to predict financial behavior, for developing the propositions. Findings: This paper define market discipline of Sharia mutual funds as withdrawal behaviour that reflects investor sensitivity to excessive risks taken by fund managers from a behavioral perspective, that could be affected by pscyhological and social factors. Practical Implications: This paper proposes certain variables which can be employed as the determinants of market discipline, including Islamic financial literacy, financial risk tolerance, attitude towards withdrawal, subjective norms, perceived behavioural control and withdrawal intentions. Originality/Value: This paper fill a lack of studies which discuss market discipline from the perspective of behavioural finance.

Suggested Citation

  • Umi Widyastuti & Erie Febrian & Sutisna & Tettet Fitrijanti, 2019. "Factors Explaining the Market Discipline of Sharia Mutual Funds from a Behavioural Finance Perspective: A Theoretical Approach," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(3), pages 198-212.
    • Handle: RePEc:ers:ijebaa:v:vii:y:2019:i:3:p:198-212
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    Cited by:

    1. Umi Widyastuti & Erie Febrian & Sutisna Sutisna & Tettet Fitrijanti, 2020. "Sharia Compliance in Sharia Mutual Funds: A Qualitative Approach," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(3), pages 19-27.

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    More about this item

    Keywords

    market discipline; attitude towards withdrawal; subjective norm; perceived behavioral control; withdrawal intention; Sharia mutual funds.;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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