IDEAS home Printed from https://ideas.repec.org/a/ora/journl/v1y2019i2p109-118.html
   My bibliography  Save this article

An Innovative Perspective On Financial Decision-Making

Author

Listed:
  • COITA Ioana–Florina

    (Department of Finance-Accounting, Faculty of Economic Sciences, University of Oradea, Oradea, Romania)

Abstract

This paper presents a multidisciplinary research that brings together areas such as finance, behavioral economics, fractal theory and management. Each of them presents a specific methodology for quantifying and measuring the analyzed phenomena. The present paper uses the multidisciplinary approach to the results of applying specific methods in areas such as psychology or exact sciences in the field of managerial finance, areas that apparently have nothing to do with each other. The results obtained from this approach highlight new knowledge, approached from a different perspective. The development of managerial finance science, a field of high interest at the moment at the level of companies, is at the heart of its financial decision-making. The paper analyzes the financing decision of enterprises both from the perspective of listed companies on the capital market as well as of the non-listed companies, and the scientific relevance of this research lies in the various conceptual clarifications presented. The degree of novelty brought by this research is supported by the innovative approach of the financing decision by addressing some elements of fractal theory, behavioral finance and managerial finances. At the same time, the paper highlights the theoretical and practical aspects of innovations in financial decision making. The impact of research results lies in the ability of the models approached to be used by any manager of a company in taking a financing decision in the context of efficient and innovative quantification of risks and performance. The risk associated with a particular form of financing is analyzed and quantified according to the specificity of the selected form of financing. This paper analyzes the defining characteristics of the risks associated with the financing decision taken by the managers of projects inside companies, taking into account the objective characteristics but also the subjective ones. This paper analyzes the innovative elements brought by the modern theories like behavioral finance, game theory, mechanism design-theory, managerial finance and others that have an impact on the financial decision process both at the enterprise level and from the perspective of the decision-making subject.

Suggested Citation

  • COITA Ioana–Florina, 2019. "An Innovative Perspective On Financial Decision-Making," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(2), pages 109-118, December.
    • Handle: RePEc:ora:journl:v:1:y:2019:i:2:p:109-118
    as

    Download full text from publisher

    File URL: http://anale.steconomiceuoradea.ro/volume/2019/n2/011.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Roger B. Myerson, 2008. "Perspectives on Mechanism Design in Economic Theory," American Economic Review, American Economic Association, vol. 98(3), pages 586-603, June.
    2. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    3. Dixit, Avinash K., 1990. "Optimization in Economic Theory," OUP Catalogue, Oxford University Press, edition 2, number 9780198772101.
    4. Fama, Eugene F. & French, Kenneth R., 1993. "Common risk factors in the returns on stocks and bonds," Journal of Financial Economics, Elsevier, vol. 33(1), pages 3-56, February.
    5. William F. Sharpe, 1964. "Capital Asset Prices: A Theory Of Market Equilibrium Under Conditions Of Risk," Journal of Finance, American Finance Association, vol. 19(3), pages 425-442, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bo-Hung Chiou & Shen-Ho Chang, 2020. "Influence of Investment Efficiency by Managers and Accounting Conservatism on Idiosyncratic Risks to Investors," Advances in Management and Applied Economics, SCIENPRESS Ltd, vol. 10(1), pages 1-8.
    2. Lars Hornuf & Gül Yüksel, 2022. "The Performance of Socially Responsible Investments: A Meta-Analysis," CESifo Working Paper Series 9724, CESifo.
    3. John R. Birge, 2015. "OM Forum—Operations and Finance Interactions," Manufacturing & Service Operations Management, INFORMS, vol. 17(1), pages 4-15, February.
    4. Ramiah, Vikash & Xu, Xiaoming & Moosa, Imad A., 2015. "Neoclassical finance, behavioral finance and noise traders: A review and assessment of the literature," International Review of Financial Analysis, Elsevier, vol. 41(C), pages 89-100.
    5. David DeBoskey & Peter Gillett, 2013. "The impact of multi-dimensional corporate transparency on us firms’ credit ratings and cost of capital," Review of Quantitative Finance and Accounting, Springer, vol. 40(1), pages 101-134, January.
    6. Teresa Chu & In-Mu Haw & Bryan Lee & Woody Wu, 2014. "Cost of equity capital, control divergence, and institutions: the international evidence," Review of Quantitative Finance and Accounting, Springer, vol. 43(3), pages 483-527, October.
    7. Madanoglu, Melih & Lee, Kyuho & Castrogiovanni, Gary J., 2011. "Franchising and firm financial performance among U.S. restaurants," Journal of Retailing, Elsevier, vol. 87(3), pages 406-417.
    8. Turner, John D., 2014. "Financial history and financial economics," QUCEH Working Paper Series 14-03, Queen's University Belfast, Queen's University Centre for Economic History.
    9. Curmei Cătălin-Valeriu & Dincă Lavinia Elena & Curmei-Semenescu Ileana Andreea, 2018. "The influence of the strategic financial policies on share valuation in an unstable economic environment," Proceedings of the International Conference on Business Excellence, Sciendo, vol. 12(1), pages 241-250, May.
    10. Chen, Li-Wen & Chen, Fan, 2009. "Does concurrent management of mutual and hedge funds create conflicts of interest?," Journal of Banking & Finance, Elsevier, vol. 33(8), pages 1423-1433, August.
    11. Henry M.K. Mok & Sandy S.M. Chau, 2003. "Corporate Performance of Mixed Enterprises," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 30(3‐4), pages 513-538, April.
    12. Wijayana, Singgih & Gray, Sidney J., 2018. "Capital market consequences of cultural influences on earnings: The case of cross-listed firms in the U.S. stock market," International Review of Financial Analysis, Elsevier, vol. 57(C), pages 134-147.
    13. Phan Tran Minh Hung & Tran Thi Trang Dai & Phan Nguyen Bao Quynh & Le Duc Toan & Vo Hoang Diem Trinh, 2019. "The Relationship between Risk and Return - An Empirical Evidence from Real Estate Stocks Listed in Vietnam," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 9(11), pages 1211-1226, November.
    14. Wolfgang Breuer & Bushra Ghufran & Astrid Juliane Salzmann, 2020. "Investors' time preferences and takeover performance," Post-Print hal-02508909, HAL.
    15. Caixe, Daniel Ferreira & Kalatzis, Aquiles Elie Guimarães & Castro, Luiz Ricardo Kabbach de, 2019. "Controlling shareholders and investment-risk sensitivity in an emerging economy," Emerging Markets Review, Elsevier, vol. 39(C), pages 133-153.
    16. Edward Vos & Bronwyn M. Smith, 2003. "Risk, Return and Degree of Owner Involvement in Privately Held Firms," Journal of Entrepreneurial Finance, Pepperdine University, Graziadio School of Business and Management, vol. 8(1), pages 31-55, Spring.
    17. Tzouvanas, Panagiotis & Mamatzakis, Emmanuel C., 2021. "Does it pay to invest in environmental stocks?," International Review of Financial Analysis, Elsevier, vol. 77(C).
    18. Herskovic, Bernard & Kelly, Bryan & Lustig, Hanno & Van Nieuwerburgh, Stijn, 2016. "The common factor in idiosyncratic volatility: Quantitative asset pricing implications," Journal of Financial Economics, Elsevier, vol. 119(2), pages 249-283.
    19. Fuller, Kathleen P. & Goldstein, Michael A., 2011. "Do dividends matter more in declining markets?," Journal of Corporate Finance, Elsevier, vol. 17(3), pages 457-473, June.
    20. Allen, Franklin & Vayanos, Dimitri & Vives, Xavier, 2014. "Introduction to financial economics," Journal of Economic Theory, Elsevier, vol. 149(C), pages 1-14.

    More about this item

    Keywords

    behavioral finance; expected value; fractals; project financing; decision model;
    All these keywords.

    JEL classification:

    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ora:journl:v:1:y:2019:i:2:p:109-118. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catalin ZMOLE (email available below). General contact details of provider: https://edirc.repec.org/data/feoraro.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.