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Impact of Locus of Control on Financial Risk-Taking Behaviour: A Perception Study among Married Earning Women in India

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  • S Kannadas
  • Mousumi Sengupta

Abstract

The locus of control measures how much a person thinks they, rather than outside influences, are in charge of how things turn out in their lives. Financial self-efficacy is influenced by locus of control. Individuals are more likely to believe they can handle their finances when they feel more capable of doing so. In particular, this study focused on married working women in India. They are more likely to effectively manage their finances if they think they can get out of financial difficulties. A questionnaire that was distributed to a convenience sample of 278 yielded responses from married working women across PAN India. The study made use of exploratory factor analysis (EFA), which reveals the scale's factor structure. The study offers statistical evidence to support the scales' reliability and validity. The statistical findings of the investigation show that locus of control and financial literacy has a favourable impact on financial behaviour. The authors also demonstrate how the relationship between internal locus of control and financial behaviour is altered by financial literacy. As a moderator variable that affects the locus of control, financial literacy is an important factor. The research's conclusions are crucial in providing empirical support for the theoretical relationships. This study has confirmed the beneficial effects of internal locus of control and financial literacy on the financial behaviour of married working women, supporting the current literature. Additionally, it has been found that a person's financial conduct and internal locus of control have different relationships depending on their financial literacy.

Suggested Citation

  • S Kannadas & Mousumi Sengupta, 2023. "Impact of Locus of Control on Financial Risk-Taking Behaviour: A Perception Study among Married Earning Women in India," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 5, pages 143-159.
    • Handle: RePEc:bas:econst:y:2023:i:5:p:143-159
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    References listed on IDEAS

    as
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    More about this item

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G40 - Financial Economics - - Behavioral Finance - - - General
    • 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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