The Effects of Behavioral Finance Practices on the Performance of Businesses: The Case of Istanbul Organized Industrial Zone

Abstract

Purpose- The aim of this study is to examine the effects of behavioral finance applications on the performance of enterprises. Design/methodology/approach – In the method section of this research, the quantitative method that analyzes the cause-effect relationship is preferred. Research data have been collected with scales with proven reliability by using them in many previous researches. Frequency, reliability, correlation, regression and difference analyzes were made to the data provided by the participants through the surveys. The universe of the study is 17,376 people working in a total of 2552 enterprises operating in the field of production and service in Istanbul Hadımköy Atatürk Organized Industrial Zone, and a total of 557 people were surveyed with a 95% confidence interval by using the sample determination table. Results – According to the results of regression analyzes, in behavioral investments; "Avoiding Regret" had a positive effect on "Business Performance" by 48.4% and "Over-optimism" had a positive effect on "Business Performance" by 59.7%. Discussion – Behavioral finance examines problems that occur under the assumption that individuals do not behave rationally, and in doing so, sociology, psychology and anthropology, etc. are used. Individuals may make erroneous decisions when they are under psychological and sociological influence while making investment decisions. Therefore, behavioral finance is an area that needs to be emphasized and is increasing in importance day by day. Therefore, in this study, it is planned to investigate the effects of behavioural finance on the business pro forma; with the idea that it can strengthen investors' predictions in investment decisions and reduce the risks to be taken.