Understanding Financial Risk Decision Making Among Managers: The Mediating Effect of Financial Literacy and Risk Perception Across Psychological Traits
Year: 2026
Type: article
Study design: Observational Study
Abstract: This study explores the impact of psychological factors on financial risk decision-making among Chinese company managers, with financial literacy and risk perception as mediating variables. Using a mixed-methods design, it combines quantitative questionnaires (distributed to 218 financial managers) and qualitative face-to-face interviews (with 6 key informants) in Shijiazhuang, Hebei, covering multiple sectors. Five core psychological factors are examined: risk tolerance, loss aversion, overconfidence, emotional resilience, and regret aversion. The findings show that these factors indirectly affect financial risk decision-making through the mediating roles of financial literacy and risk perception. Risk tolerance, emotional resilience, and overconfidence positively relate to rational financial decisions when mediated by financial literacy, while loss aversion and regret aversion have negative effects via risk perception. This research enriches behavioral finance theory and offers practical implications for organizations to reduce cognitive biases and improve decision quality.
Authors: Yuan Ding, Shi-Min How
Institutions: MILA University, Hebei Vocational College of Labour Relations
Language: English
Subfield: General Decision Sciences
Field: Decision Sciences
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W7146985877