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Corporate Governance and New Product Offerings at Local Commercial Banks in Pakistan

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  • Naz, Sana

Abstract

The main objective of this study is to analyze the determinants of risk-taking behavior. Consistent with models of risk return, we indicate that risk-taking behavior in the context of investment is affected by the risk of self-attitudes, and perceptions of risk and return expectations. One implication of our study is that objective measures of risk, such as historical volatility and return, are not able to determine the risk-taking behavior almost as well as subjective measures, the risk perceptions and self-return, especially the historical returns seems to be a poor indicator of risk-taking behavior. Moreover, we find substantial differences between the self-perceptions of risk is inferred from the interval estimates and inferred from those of the Likert scales. Our results also indicate that, in line with theoretical models, behavioral biases such as overconfidence and excessive optimism significantly affect risk behavior. Those investment advisers can try to incorporate some of these results in the consultative processes to correct the erroneous beliefs of investors. This can be achieved through the strengthening of the patch from the financial literacy of clients as well as showing them that their investment is required is probably more serious than originally envisaged by them. We also find evidence of the expanding scope of content in the privacy of our data. Determinants of risk-taking behavior differ not only between the two areas of content and very clear, but even in the field of investments. Show that the determinants of risk behavior in the field of investments, lottery does not need to be able to predict the risk in equity investments, and vice versa. Measuring risk attitudes using lotteries approach is useless and therefore if we want to predict the behavior of risk in financial securities. It therefore seems that (method is used to have, for example, often in surveys of large plate-sized enterprises, such as socio-economic panel (SOEP), as well as in the banking industry) to extract positions risk customers by asking them about his conviction cannot predict the risk behavior of individuals.

Suggested Citation

  • Naz, Sana, 2008. "Corporate Governance and New Product Offerings at Local Commercial Banks in Pakistan," MPRA Paper 116401, University Library of Munich, Germany, revised 03 Jan 2023.
    • Handle: RePEc:pra:mprapa:116401
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    References listed on IDEAS

    as
    1. Rizvi, Aoun & Ali, Syed Babar, 2011. "Risk Taking Behavior of Investors of Pakistan," MPRA Paper 64342, University Library of Munich, Germany.
    2. Ahmad, Baseer & Ali, Syed Babar, 2012. "Do Individual Investors in Pakistan Prefer Dividends?," MPRA Paper 64205, University Library of Munich, Germany.
    3. Ali, Syed Babar, 2012. "Corporate Governance and Accounting Practices in Pakistan," MPRA Paper 64713, University Library of Munich, Germany.
    4. Ali Zaidi, Syed Najaf & Ali, Syed Babar, 2006. "Risk and Scope of Debit Check Card in Competitive Market of Pakistan," MPRA Paper 64456, University Library of Munich, Germany.
    5. Ahmad, Mashood & Ali, Syed Babar, 2008. "Technical Analysis in the Stock Markets of Pakistan: A Case of Commercial Banks," MPRA Paper 64521, University Library of Munich, Germany.
    6. M.Usman Aleem & Marria Purwani & Usman Ali & Syed Babar Ali 5 & Naeem Bhojani, 2018. "Power Of Training And Development On Employee Retention In Pharmaceutical Organization," IBT Journal of Business Studies (JBS), Ilma University, Faculty of Management Science, vol. 14(2), pages 148-157.
    7. Hussain, Zahir & Ali, Syed Babar, 2009. "Implementation of Operational Risk Regime: A Case of Commercial Banks in Pakistan," MPRA Paper 64469, University Library of Munich, Germany.
    8. Syed Babar Ali & Manzoor A.Khalidi, 2020. "Valuation of Equity Securities, Private Firms, and Startups," IBT Journal of Business Studies (JBS), Ilma University, Faculty of Management Science, vol. 16(1), pages 125-140.
    9. Zia Ullah & Mohammed Ali Bait Ali Sulaiman & Syed Babar Ali & Naveed Ahmad & Miklas Scholz & Heesup Han, 2021. "The Effect of Work Safety on Organizational Social Sustainability Improvement in the Healthcare Sector: The Case of a Public Sector Hospital in Pakistan," IJERPH, MDPI, vol. 18(12), pages 1-18, June.
    10. M.Usman Aleem & Marria Purwani & Usman Ali & Syed Babar Ali 5 & Naeem Bhojani, 2018. "Power Of Training And Development On Employee Retention In Pharmaceutical Organization," IBT Journal of Business Studies (JBS), Ilma University, Faculty of Management Science, vol. 14(2), pages 14-12.
    11. Syed Babar Ali & Manzoor A.Khalidi, 2020. "Valuation of Equity Securities, Private Firms, and Startups," IBT Journal of Business Studies (JBS), Ilma University, Faculty of Management Science, vol. 16(1), pages 16-19.
    12. Ali, Madiha & Ali, Syed Babar, 2014. "The Impact of Working Capital Management on Firm Profitability and Fixed Investment in Pakistan," MPRA Paper 64520, University Library of Munich, Germany.
    13. Umair Baig & Dr. Muhammad Arsalan Hashmi & Syed Babar Ali & Dr. Saba Zehara, 2020. "Exploratory Sequential Mixed Methods In Doctorate Research: Extended Application Of Constructivist Grounded Theory," IBT Journal of Business Studies (JBS), Ilma University, Faculty of Management Science, vol. 16(2), pages 47-65.
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    More about this item

    Keywords

    Corporate governance: new product development;

    JEL classification:

    • G0 - Financial Economics - - General
    • G3 - Financial Economics - - Corporate Finance and Governance

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