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The behavioral biases of Muslims in Islamic banking and finance: a second-order self-reported religiosity measurement invariance

Adewale, Abideen Adeyemi and Haron, Razali (2016) The behavioral biases of Muslims in Islamic banking and finance: a second-order self-reported religiosity measurement invariance. Al-Shajarah, Special Issue (Islamic Banking and Finance). pp. 87-114. ISSN 1394-6870

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This study examines a measurement invariance of a second-order factor model of the behavioral biases in Islamic banking and finance activities among Muslims in Malaysia. Data elicited via a survey questionnaire was subjected to structural equation modeling analysis using the Amos 23.0 software. The study revealed that behavioral biases as a second-order factor is indicated by herding, cognitive dissonance, anchoring, regret aversion and overconfidence of first order factors. Measurement invariance was tested based on self-reported religiosity across a number of hierarchically structured invariance analysis models, including configural at the first-order level, metric, intercepts, and residuals at both the first-order and second-order levels. A significant variance was observed between the high and low self-reported religiosity groups. However, no difference was observed between the two groups and the ‘moderate’self-reported religiosity groups. Furthermore, based on the critical ratio score of statistical significance at alpha of 0.001, the latent mean difference tests of the second-order model indicates statistical significance across groups based on a path-by-path analysis.

Item Type: Article (Journal)
Additional Information: 6700/54446
Uncontrolled Keywords: psychological biases, measurement invariance, Islamic banking, Islamic finance, second-order factor.
Subjects: H Social Sciences > H Social Sciences (General)
H Social Sciences > HG Finance > HG4001 Financial management. Business finance. Corporation finance.
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button): Institute of Islamic Banking & Finance (IIiBF)
Depositing User: Dr. Razali Haron
Date Deposited: 12 Jan 2017 09:54
Last Modified: 20 Oct 2017 17:09
URI: http://irep.iium.edu.my/id/eprint/54446

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