The transformative role of firm information transparency in triggering retail investor's perceived financial well-being
International Journal of Bank Marketing
ISSN: 0265-2323
Article publication date: 7 May 2021
Issue publication date: 28 October 2021
Abstract
Purpose
Based on transformative service research (TSR), the study explores the mechanisms by which a firm's information transparency influences a retail investor's perceived financial well-being (PFW). It proposes a model exploring the mediating roles of the investor's financial risk tolerance (RT) and financial self-efficacy (FSE) in the relationship between a firm's information transparency and the consumer's PFW.
Design/methodology/approach
A survey was conducted by including a sample of 310 retail investors from Pakistan Stock Exchange (PSX) to test the proposed hypotheses. Data analysis was based on a series of multiple regressions, moderation and serial mediation analyses.
Findings
The findings show that a firm's information transparency harnesses investors' PFW. Information transparency also positively affects investors' RT toward the firm and their FSE while dealing with financial challenges.
Research limitations/implications
The findings call for a deeper understanding of financial services' interventions and their underlying mechanisms to improve consumer’s financial well-being (FWB). On a methodology level, future studies could apply a mixed-method approach and SEM to explore new avenues for predicting investors' FWB.
Practical implications
Besides validating TSR, the study has several implications for listed firms to adopt more transparent information reporting practices to improve investors' PFW. Accordingly, regulators should take initiatives to compel firms to comply with higher standards of information transparency.
Originality/value
The proposed model explores a concrete mechanism that helps listed firms to strengthen investors' PFW via information transparency.
Keywords
Citation
Naveed, M., Farah, M.F. and Hasni, M.J.S. (2021), "The transformative role of firm information transparency in triggering retail investor's perceived financial well-being", International Journal of Bank Marketing, Vol. 39 No. 7, pp. 1091-1113. https://doi.org/10.1108/IJBM-02-2021-0068
Publisher
:Emerald Publishing Limited
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