Abstract
This study (a) investigates dispositional attributes regarding the risk-related personality, attitude, and behavior of college students majoring in financial engineering (FE-major group) and business (business-major group); and (b) examines whether risky behavior is differentially explained by explicit versus implicit attitude toward stock investment. The FE-major group scored consistently higher than the business-major group on measures of sensation-seeking, financial risk-taking, and computerized risk-taking behavior. This pattern was also observed in the two explicit attitudinal measures of risk, whereas no group differences were noted on the two corresponding implicit measures of risk. A newly developed implicit measure of stock investment showed incremental validity in predicting risky behavior beyond the corresponding explicit measure.
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Notes
Because mandatory and advanced courses related to their major field of study were offered independently by each department, FE- and business-major students were not found to encounter each other in these courses. Additionally, no students were found to have changed their majors from FE to business administration, or vice versa.
This study used a slightly modified version of the SMAU, replacing the word “University” with the phrase “the department to which I belong” in the relevant items, to measure the students’ motivations for selecting their specific academic department rather than the university itself.
Considering the low reliability coefficient of the risk control scale and based on the results of confirmatory factor analysis (see Appendix B), we used two of the five items in the scale (i.e., Items 1 and 2, Appendix A) throughout the analyses, which led to an increase in the reliability coefficient of the risk control scale (α = .59).
The bipolar pairs of adjectives (e.g., aggressive/conservative) adopted in this study have been widely used to describe investors’ attitudes toward risk, portfolio selection, and trading and investment patterns (Goetzmann and Kumar 2008).
As in the original IRT-Global test, a blank (i.e., “[]”) category was used in the ISI so that responses to the category “[]” could be used as a neutral baseline in comparison to “My Stock Investment.” This is because there is no valid category for a comparison with the theoretical category of my stock investment when assessing a person’s implicit evaluation of his/her own stock investment.
To facilitate participants in reaching a common understanding of what is meant by the two evaluative categories (i.e., aggressive and conservative), they were described as attributes that represent a person’s tendency toward taking or avoiding risks, respectively, when investing in stocks.
Additional data were collected from 151 undergraduate students (94 men; age M = 22.03, SD = 2.54) to provide further evidence of convergent validity in the form of correlations between ISI and FRT. Inter-correlations showed significant associations of ISI with FRT-SR, r = .20, p = .03, and FRT-RC, r = −.15, p = .06 (marginal significance).
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Acknowledgements
The authors gratefully acknowledge the members of the Institute for Interdisciplinary Research in Business and Psychology and Global Management for their invaluable assistance in the completion of this research.
Informed Consent
Although the IRB process was not available at the time of conducting the present study, the present research was implemented with proper procedure such as based on APA ethical standard, and informed consent was obtained from all individual participants included in the study as below.
Funding
The author(s) disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: This work was supported by a grant funded by the National Research Foundation of Korea (NRF-2016S1A5A2A01025621) awarded to Do-Yeong Kim.
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Appendices
Appendix 1: Financial Risk-Taking Items
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1.
When I invest money, a safe return is very important to me. (RC)
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2.
I prefer putting money into a bank account because then I know exactly how much money I will have in the future. (RC)
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3.
When I invest money, I want to be in control regarding the return. (RC)
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4.
I like to seek thrills in having high returns on investments. (SR)
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5.
It is important to know how much money my investment will provide me with in the future. (RC)
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6.
I see risk as an opportunity to make money. (SR)
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7.
For my personal investments, I prefer stocks that have undergone significant fluctuations in price during the last six months, because then there is potential for a high return on the investment. (SR)
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8.
I get a thrill out of investing. (SR)
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9.
When I invest money, a high return on my investment is the most important aspect, even though it means accepting a high degree of risk. (SR)
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10.
When I invest, I plan on having a specific amount at a future date. (RC)
Note: SR = Speculative Risk; RC = Risk Control
Appendix 2
Confirmatory Factor Analyses (CFAs) of the Financial Risk-Taking Scale
To improve the psychometric property (i.e., reliability) of risk control, we first conducted CFA without altering the proposed two-factor model of financial risk-taking to eliminate items from each subscale that did not load on the factor they were intended to assess (see left panel). The 10-item model had a poor fit, χ2(34, N = 287) = 133.04 (p < .05), CFI = .81, NFI = .77, TLI = .75, RMSEA = .10, and three out of the five items of risk control (items 3, 5, and 10) did not meet the recommended cut-offs for statistical significance of factor loadings (0.30; Hair et al., 1998). Consequently, we conducted a further analysis with a seven-item model (see right panel) in which the three items below the cut-offs were excluded. The test statistics indicated a moderately good fit, χ2(13, N = 287) = 57.05 (p < .05), CFI = .90, NFI = .88, TLI = .84, RMSEA = .10, and a chi-square test of significance for the difference between the two models revealed significantly better fit for the seven-item model, Δχ2(21, N = 287) = 75.99 (p < .05). Additionally, the reliability of risk control, including only the two items above the cut-offs (items 1 and 2), was enhanced (Cronbach’s α = .59).
Appendix 3
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Park, J., Kim, DY. & Oh, S. Explicit and implicit stock investment: Differences in psychological characteristics and risky behavior between college students majoring in financial engineering or business. Curr Psychol 39, 1954–1969 (2020). https://doi.org/10.1007/s12144-019-00555-9
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DOI: https://doi.org/10.1007/s12144-019-00555-9