Financial risk-taking and trait emotional intelligence

Alessandro Bucciol, Federico Guerrero and Dimitra Papadovasilaki

Review of Behavioral Finance, 2020, vol. 13, issue 3, 259-275

Abstract: Purpose - The purpose of this paper is to study the relationship between financial risk-taking and trait emotional intelligence (EI). Design/methodology/approach - An incentivized online survey was conducted to collect the data, including measurements for cognitive ability and socio-demographic characteristics. Findings - There is a positive correlation between trait EI and financial risk-taking that is at least as large as that between risk-taking and measures of cognitive control (CRT). Trait EI is a key determinant of risk-taking. However, not all components of trait EI play an identical role. In fact, we observe positive effects of well-being, mainly driven by males and sociability. Self-control seems to matter only for males. Research implications/limitations - This study suffers from the bias of self-reported answers, a common limitation of all survey studies. Practical implications - This evidence provides a noncognitive explanation for the typically observed heterogeneity of financial risk-taking, in addition to more established explanations linked to cognitive skills. Investor profiles should bealsodetermined on their trait EI. Social implications - Governments should start programs meant to improve the level of trait EI to ameliorate individual wealth outcomes. Female investors participation in the financial markets might increase by fostering their sociability. Originality/value - The relationship between trait EI and each of its components with financial risk-taking is vastly unexplored, while it is the first time that gender effects are discussed in that set up.

Keywords: Willingness to take financial risks; Emotional intelligence; D14; D91 (search for similar items in EconPapers)
Date: 2020
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:rbfpps:rbf-01-2020-0013

DOI: 10.1108/RBF-01-2020-0013

Access Statistics for this article

Review of Behavioral Finance is currently edited by Professor Gulnur Muradoglu

More articles in Review of Behavioral Finance from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().