Zaighum, Isma and Abd Karim, Mohd Zaini (2019) Peer effects, financial decisions and industry concentration: A review. SEISENSE Journal of Management, 2 (2). pp. 13-21. ISSN 2617-5770

PDF Restricted to Registered users only Download (382kB) | Request a copy

Abstract

Purpose- This article reviews literature related to peer effects and different financial decisions. It further summarizes the theory and motives that drive peer effects. Also, the study highlights the influence of industry concentration on peer interaction in financial decision making. This content analysis of scantily available peer effect literature has been performed to highlight the significance of peer effects in financial decision making like investment, cash holding, leverage and many more. Most of the existing peer effects literature focuses on the U.S. However, peer effects also occur in other countries but empirical evidence is comparatively limited. But, managers may take into consideration their industry peers especially if their firms are operating in highly competitive environments. Design/Methodology- Content analysis approach is applied to review prevailing financial literature on peer interactions and financial decisions with a special focus on industry concentration in explaining the peer effects.Practical Implications- As the prime focus of managerial decisions is to maximize the firm’s value. Hence, information about peers would be helpful in making better decisions, especially in highly competitive environments. Also, this review of selected literature provides pathways for future research in investigating the motives of peer effects.

Item Type:	Article
Uncontrolled Keywords:	Peer effect, Finance, Industry Concentration, Review
Subjects:	H Social Sciences > HG Finance
Divisions:	Othman Yeop Abdullah Graduate School of Business
Depositing User:	Mrs. Norazmilah Yaakub
Date Deposited:	13 Aug 2020 02:25
Last Modified:	13 Aug 2020 02:25
URI:	https://repo.uum.edu.my/id/eprint/27326

Actions (login required)

View Item