Leadership Traits and Investment Behavior: Examining the Influence of Leadership Characteristics on Behavioral Biases in Financial Decision-Making
Year: 2024
Type: article
Study design: Observational Study
Abstract: This study investigates the relationship between leadership traits and behavioral biases in investment decisionmaking. Through a quantitative survey of 172 investors, the research examines how leadership characteristics influence susceptibility to overconfidence bias, anchoring bias, herding behavior, and loss aversion in investment contexts. The findings reveal a moderate negative correlation (-0.256) between leadership traits and behavioral biases, suggesting that stronger leadership qualities may help mitigate investment biases. However, regression analysis indicates this relationship is complex, with leadership traits explaining only a small portion of bias variance. The study finds that strategic decision-making capacity has the strongest negative correlation (-0.32) with overconfidence bias, while proactive management skills show consistent negative correlations across all behavioral biases. These findings contribute to both leadership and behavioral finance literature by establishing a novel connection between leadership traits and investment behavior, while highlighting the multifaceted nature of this relationship. The research has practical implications for investment advisors and leadership development programs, suggesting the need for integrated approaches that consider both leadership qualities and behavioral aspects in improving investment decision-making.
Author: Rahil Savla
Language: English
Subfield: General Decision Sciences
Field: Decision Sciences
Domain: Social Sciences
Open Access status: bronze
OpenAlex ID: W4404902649