Behavioral Biases and Investment Decisions of SMEs Managers: Empirical Analysis within the Moroccan Context

Khaoula Benayad () and Mohammed Rachid Aasri
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Khaoula Benayad: Research Laboratory in Economic Competitiveness and Managerial Performance, Faculty of Law, Economic and Social Sciences—Souissi, Mohammed V University, Rabat 10112, Morocco
Mohammed Rachid Aasri: Research Laboratory in Economic Competitiveness and Managerial Performance, Faculty of Law, Economic and Social Sciences—Souissi, Mohammed V University, Rabat 10112, Morocco

IJFS, 2023, vol. 11, issue 4, 1-18

Abstract: This article examines the impact of overconfidence, optimism, risk aversion, mimicry and intuition biases on the investment decisions of Moroccan SMEs managers. The study was based on a sample of 133 SMEs managers, who were randomly selected to ensure the representativeness of the results. Analysis showed that optimistic managers tend to make investment decisions more frequently, while those who are more risk-averse adopt a more cautious approach. Mimicry was also identified as an influential factor in investment decisions, with executives likely to be influenced by the choices of their peers. Furthermore, intuition bias was also identified as a positive factor in the investment decision-making process, enabling managers to capitalize on their experience and tacit knowledge for more appropriate and timely choices. However, overconfidence showed no significant effect on investment decisions. These findings have important implications for the managers of Moroccan SMEs, enabling them to better understand the factors influencing their investment decisions, and to optimize the allocation of their financial resources for the sustainable growth of their businesses.

Keywords: behavioral finance; overconfidence; optimism; risk-taking; mimicry; intuition; investment decisions (search for similar items in EconPapers)
JEL-codes: F2 F3 F41 F42 G1 G2 G3 (search for similar items in EconPapers)
Date: 2023
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