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A Research on Consumer Behavior Towards Interestfree Financing with Special Reference to Planned Behavior Theory: An Empirical Analysis

Author

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  • Abdullah Mesut UÇAR

    (Helal Finans Araştırmaları Derneği (HEFİAD),Istanbul, Turkey)

Abstract

This study seeks to empirically analyze the validity of consumer tendency/ behavior towards the interest-free financing models with reference to the planned behavior theory (PBT). Additionally, the research further tests the validity of the hypotheses on the consumer tendencies towards interest-free financing via PBT in Turkey and other predominantly Muslim countries. To this end, the main variables of the theory, attitude, subjective norm, and perceived behavioral control, have been redefined through certain factors spelled out in the literature. Subsequently, they have been analyzed through the Cronbach Alpha test in the relevant parts of the survey done with the participation of 235 persons. The study concludes that the attitude variable, redefined through the factors of desire for a fair financial system and cost advantage, determines the consumer behavior towards interest-free financial models. Additionally, it has also been observed that the avoidance from interest, one of the factors that define the subjective norm variable, underscores the consumer behavior towards these financial methods. However, the chi-square test results suggest that the subjective norm and perceived behavioral control variables do not provide consistent outcomes. Also, it can be said that the work is original due to a special reference to PBT in the sample of Turkey, even though it is similar to interest-free finance studies made with PBT.

Suggested Citation

  • Abdullah Mesut UÇAR, 2020. "A Research on Consumer Behavior Towards Interestfree Financing with Special Reference to Planned Behavior Theory: An Empirical Analysis," Journal of Economic Policy Researches, Istanbul University, Faculty of Economics, vol. 7(1), pages 69-88, January.
    • Handle: RePEc:ist:iujepr:v:7:y:2020:i:1:p:69-88
    DOI: 10.26650/JEPR652338
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    References listed on IDEAS

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    2. saleem, shahid, 2007. "International Islamic Banking," MPRA Paper 6635, University Library of Munich, Germany.
    3. Muhammad Ali & Syed Ali Raza & Chin-Hong Puah & Mohd Zaini Abd Karim, 2017. "Islamic home financing in Pakistan: a SEM-based approach using modified TPB model," Housing Studies, Taylor & Francis Journals, vol. 32(8), pages 1156-1177, November.
    4. Ajzen, Icek, 1991. "The theory of planned behavior," Organizational Behavior and Human Decision Processes, Elsevier, vol. 50(2), pages 179-211, December.
    5. Hanudin Amin & Abdul Rahim Abdul Rahman & Dzuljastri Abdul Razak & Hamid Rizal, 2017. "Consumer attitude and preference in the Islamic mortgage sector: a study of Malaysian consumers," Management Research Review, Emerald Group Publishing Limited, vol. 40(1), pages 95-115, January.
    6. Jasim Al‐Ajmi & Hameeda Abo Hussain & Nadhem Al‐Saleh, 2009. "Clients of conventional and Islamic banks in Bahrain," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 36(11), pages 1086-1112, September.
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    More about this item

    Keywords

    Consumer behavior; interest-free financing; planned behavior theory; fair financial system; cost advantage;
    All these keywords.

    JEL classification:

    • F65 - International Economics - - Economic Impacts of Globalization - - - Finance
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets

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