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Asri, M. (2013). Keuangan Keperilakuan (1st ed.). BPFE-YOGYAKARTA.
Bowman, E. H. (1980). A risk/return paradox for strategic management. Working Paper (Sloan School of Management) ; 1107-80., 53(9), 1689–1699.
Bromiley, P. (1991). Testing a Causal Model of Corporate Risk Taking and Performance. The Academy of Management Journal, 34(1), 37–69. https://doi.org/10.1111/j.1533-8525.1970.tb01322.x
Brumagim, A. L., & Xianhua, W. (2016). An Examination of Cross-cultural Differences in Attitudes Towards Risk: Testing Prospect Theory in the People’s Republic of China. The Multinational Business Review, 13. https://doi.org/1525383X200500015
Cootner, P. H., & Holland, D. M. (1970). Rate of Return and Business Risk. The Bell Journal of Economics and Management Science, 1(2), 211. https://doi.org/10.2307/3003181
Dananjaya, Y., Irwanto, A., & Susilowati, E. (2018). The Effect of Company Performance to Managerial Risk Taking: an Insight from Prospect Theory. International Conference on Family Business & Entrepreneurship 2018.
Das Gupta, R. (2017). Risk-attitudes of the NSE 500 firms—Bowman’s paradox and prospect theory perspectives. IIMB Management Review, 29(2), 76–89. https://doi.org/10.1016/j.iimb.2017.04.001
Dasgupta, R. (2014). Risk Attitudes of the Listed Indian Financial Companies : A Prospect Theory Perspective. Rajagiri Management Journal, 8(2).
Dasgupta, R. (2017). Behavioral implications of risk-return associations: An application of prospect theory on CNX NIFTY companies. Australasian Accounting, Business and Finance Journal, 11(3), 103–126. https://doi.org/10.14453/aabfj.v11i3.8
Dewi Sanjaya, I., & Martono, S. (2019). Determinant of Firm Value in Property, Real Estate and Construction Sector 2015-2017. Management Analysis Journal, 8(3), 120–128.
Díez-Esteban, J. M., García-Gómez, C. D., López-Iturriaga, F. J., & Santamaría-Mariscal, M. (2017). Corporate risk-taking, returns and the nature of major shareholders: Evidence from prospect theory. Research in International Business and Finance, 42, 900–911. https://doi.org/10.1016/j.ribaf.2017.07.025
Fiegenbaum, A. (1990). Prospect theory and the risk-return association. An empirical examination in 85 industries. Journal of Economic Behavior and Organization, 14(2), 187–203. https://doi.org/10.1016/0167-2681(90)90074-N
Fiegenbaum, A., & Thomas, H. (1988). Attitudes Toward Risk and The Risk–Return Paradox: Prospect Theory Explanations. Academy of Management Journal, 31(1), 85–106. https://doi.org/10.5465/256499
Fisher, I. ., & Hall, G. . (1969). Risk and Corporate Rates of Return. The Quarterly Journal of Economics, 83(1), 79–92.
Gujarati, D., & Porter, D. (2015). Dasar-Dasar Ekonometrika (5th ed.). McGraw-Hill Education.
Harlan, J. (2018). Analisis Variansi. Gunadarma.
Haryanto. (2006). Teori Prospek Dan Pembuatan Keputusan: Suatu Studi Empiris Untuk Kasus Indonesia. In Jurnal Manajemen Akuntansi & Sistem Informasi (Vol. 6, p. 42).
Ho, T.-H., & Zhang, J. (2008). Designing pricing contracts for boundedly rational customers: Does the framing of the fixed fee matter? Management Science, 54(4), 686–700. https://doi.org/10.1287/mnsc.1070.0788
Hofstede, G., & McCrae, R. R. (2004). Personality and Culture Revisited: Linking Traits and Dimensions of Culture. Cross-Cultural Research, 38(1), 52–88. https://doi.org/10.1177/1069397103259443
Holmes, R. M., Bromiley, P., Devers, C. E., Holcomb, T. R., & McGuire, J. B. (2011). Management theory applications of prospect theory: Accomplishments, challenges, and opportunities. Journal of Management, 37(4), 1069–1107. https://doi.org/10.1177/0149206310394863
Illiashenko, P. (2019). “Tough Guy” vs. “Cushion” hypothesis: How does individualism affect risk-taking? Journal of Behavioral and Experimental Finance, 24(xxxx), 100212. https://doi.org/10.1016/j.jbef.2019.04.005
Joehana, R., & Suk, S. S. (2016). NON-LINEAR EFFECTS OF MANAGERIAL RISK-TAKING ON FIRM PERFORMANCE IN INDONESIA. International Conference in Innovative Business and Entrepreneurship 2016 May.
Johnson, J. (2014). Human Decision Making is Rarely Rational. Designing with the Mind in Mind, 169–185. https://doi.org/10.1016/b978-0-12-407914-4.00012-9
Kahneman, D. (2011). Thinking Fast And Slow. PT Gramedia Pustaka Utama.
Kahneman, D., & Tversky, A. (1979). Prospect Theory: An Analysis of Decision under Risk. Econometrica, 47, 1689–1699.
Kliger, D., & Tsur, I. (2011). Prospect theory and risk-seeking behavior by troubled firms. Journal of Behavioral Finance, 12(1), 29–40. https://doi.org/10.1080/15427560.2011.555028
Lazuardhi, M. H. (2016). The Relationship between Return on Equity and Risk: The Test of the Prospect Theory in Indonesia. Universitas Gadjah Mada.
Mahmood, I., Zulfiqar, S., & Shah, A. (2015). Corporate Finance and Prospect Theory : An Empirical Analysis. Pakistan Journal of Social Sciences (PJSS), 35(2), 573–583.
Marzo, G. (2012). Risk-Return Association for Italian Non-Financial Firms from a Prospect Theory Perspective. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.1701684
Miller, K. D., & Bromiley, P. (1990). Strategic Risk and Corporate Performance: an Analysis of Alternative Risk Measures. Academy of Management Journal, 33(4), 756–779. https://doi.org/10.5465/256289
Mushtaq, H., Aslam, N., & Mushtaq, N. (2015). Prospect theory and risk-seeking behavior by troubled firms. Developing Country Studies, 5(21). https://doi.org/10.1080/15427560.2011.555028
Neumann, J. Von, & Morgenstern, O. (1944). THEORY OF GAMES AND ECONOMIC BEHAVIOR. In Princeton University Press. Princeton University Press.
Patel, P. C., Li, M., & Park, H. D. (2018). A replication of Bowman’s paradox across 28 countries. Journal of Innovation and Knowledge, 3(3), 128–142. https://doi.org/10.1016/j.jik.2016.12.006
Putri, R. D. (2018). PENGUJIAN PROSPECT THEORY PADA PERUSAHAAN YANG TERDAFTAR DI BURSA EFEK INDONESIA. UNIVERSITAS GADJAH MADA.
Rieger, M. O., Wang, M., & Hens, T. (2011). Prospect Theory around the World. Norges Handelshoyskole, October.
Sajjad Nuir, R., & Asri, M. (2019). Bowman ’ s Paradox : Prospect-Theory-Based Risk-Return Relationship ( Some Recent Evidences in Indonesia ). Indonesian Capital Market Review 11, 11(January), 1–14.
Sinha, T. (1994). Prospect theory and the risk return association: Another look. Journal of Economic Behavior and Organization, 24(2), 225–231. https://doi.org/10.1016/0167-2681(94)90029-9
Soejono, F., & Heriyanto, H. (2018). Privatization and Firm Performance: a Study of Indonesia’s State-owned Enterprises. Jurnal Dinamika Manajemen, 9(2), 149–158. https://doi.org/10.15294/jdm.v9i2.14970
Tversky, A., & Kahneman, D. (1986). Rational Choice and The Framing of Decisions. The Journal of Business, 54(4), 251 – 278.
Asri, M. (2013). Keuangan Keperilakuan (1st ed.). BPFE-YOGYAKARTA.
Bowman, E. H. (1980). A risk/return paradox for strategic management. Working Paper (Sloan School of Management) ; 1107-80., 53(9), 1689–1699.
Bromiley, P. (1991). Testing a Causal Model of Corporate Risk Taking and Performance. The Academy of Management Journal, 34(1), 37–69. https://doi.org/10.1111/j.1533-8525.1970.tb01322.x
Brumagim, A. L., & Xianhua, W. (2016). An Examination of Cross-cultural Differences in Attitudes Towards Risk: Testing Prospect Theory in the People’s Republic of China. The Multinational Business Review, 13. https://doi.org/1525383X200500015
Cootner, P. H., & Holland, D. M. (1970). Rate of Return and Business Risk. The Bell Journal of Economics and Management Science, 1(2), 211. https://doi.org/10.2307/3003181
Dananjaya, Y., Irwanto, A., & Susilowati, E. (2018). The Effect of Company Performance to Managerial Risk Taking: an Insight from Prospect Theory. International Conference on Family Business & Entrepreneurship 2018.
Das Gupta, R. (2017). Risk-attitudes of the NSE 500 firms—Bowman’s paradox and prospect theory perspectives. IIMB Management Review, 29(2), 76–89. https://doi.org/10.1016/j.iimb.2017.04.001
Dasgupta, R. (2014). Risk Attitudes of the Listed Indian Financial Companies : A Prospect Theory Perspective. Rajagiri Management Journal, 8(2).
Dasgupta, R. (2017). Behavioral implications of risk-return associations: An application of prospect theory on CNX NIFTY companies. Australasian Accounting, Business and Finance Journal, 11(3), 103–126. https://doi.org/10.14453/aabfj.v11i3.8
Dewi Sanjaya, I., & Martono, S. (2019). Determinant of Firm Value in Property, Real Estate and Construction Sector 2015-2017. Management Analysis Journal, 8(3), 120–128.
Díez-Esteban, J. M., García-Gómez, C. D., López-Iturriaga, F. J., & Santamaría-Mariscal, M. (2017). Corporate risk-taking, returns and the nature of major shareholders: Evidence from prospect theory. Research in International Business and Finance, 42, 900–911. https://doi.org/10.1016/j.ribaf.2017.07.025
Fiegenbaum, A. (1990). Prospect theory and the risk-return association. An empirical examination in 85 industries. Journal of Economic Behavior and Organization, 14(2), 187–203. https://doi.org/10.1016/0167-2681(90)90074-N
Fiegenbaum, A., & Thomas, H. (1988). Attitudes Toward Risk and The Risk–Return Paradox: Prospect Theory Explanations. Academy of Management Journal, 31(1), 85–106. https://doi.org/10.5465/256499
Fisher, I. ., & Hall, G. . (1969). Risk and Corporate Rates of Return. The Quarterly Journal of Economics, 83(1), 79–92.
Gujarati, D., & Porter, D. (2015). Dasar-Dasar Ekonometrika (5th ed.). McGraw-Hill Education.
Harlan, J. (2018). Analisis Variansi. Gunadarma.
Haryanto. (2006). Teori Prospek Dan Pembuatan Keputusan: Suatu Studi Empiris Untuk Kasus Indonesia. In Jurnal Manajemen Akuntansi & Sistem Informasi (Vol. 6, p. 42).
Ho, T.-H., & Zhang, J. (2008). Designing pricing contracts for boundedly rational customers: Does the framing of the fixed fee matter? Management Science, 54(4), 686–700. https://doi.org/10.1287/mnsc.1070.0788
Hofstede, G., & McCrae, R. R. (2004). Personality and Culture Revisited: Linking Traits and Dimensions of Culture. Cross-Cultural Research, 38(1), 52–88. https://doi.org/10.1177/1069397103259443
Holmes, R. M., Bromiley, P., Devers, C. E., Holcomb, T. R., & McGuire, J. B. (2011). Management theory applications of prospect theory: Accomplishments, challenges, and opportunities. Journal of Management, 37(4), 1069–1107. https://doi.org/10.1177/0149206310394863
Illiashenko, P. (2019). “Tough Guy” vs. “Cushion” hypothesis: How does individualism affect risk-taking? Journal of Behavioral and Experimental Finance, 24(xxxx), 100212. https://doi.org/10.1016/j.jbef.2019.04.005
Joehana, R., & Suk, S. S. (2016). NON-LINEAR EFFECTS OF MANAGERIAL RISK-TAKING ON FIRM PERFORMANCE IN INDONESIA. International Conference in Innovative Business and Entrepreneurship 2016 May.
Johnson, J. (2014). Human Decision Making is Rarely Rational. Designing with the Mind in Mind, 169–185. https://doi.org/10.1016/b978-0-12-407914-4.00012-9
Kahneman, D. (2011). Thinking Fast And Slow. PT Gramedia Pustaka Utama.
Kahneman, D., & Tversky, A. (1979). Prospect Theory: An Analysis of Decision under Risk. Econometrica, 47, 1689–1699.
Kliger, D., & Tsur, I. (2011). Prospect theory and risk-seeking behavior by troubled firms. Journal of Behavioral Finance, 12(1), 29–40. https://doi.org/10.1080/15427560.2011.555028
Lazuardhi, M. H. (2016). The Relationship between Return on Equity and Risk: The Test of the Prospect Theory in Indonesia. Universitas Gadjah Mada.
Mahmood, I., Zulfiqar, S., & Shah, A. (2015). Corporate Finance and Prospect Theory : An Empirical Analysis. Pakistan Journal of Social Sciences (PJSS), 35(2), 573–583.
Marzo, G. (2012). Risk-Return Association for Italian Non-Financial Firms from a Prospect Theory Perspective. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.1701684
Miller, K. D., & Bromiley, P. (1990). Strategic Risk and Corporate Performance: an Analysis of Alternative Risk Measures. Academy of Management Journal, 33(4), 756–779. https://doi.org/10.5465/256289
Mushtaq, H., Aslam, N., & Mushtaq, N. (2015). Prospect theory and risk-seeking behavior by troubled firms. Developing Country Studies, 5(21). https://doi.org/10.1080/15427560.2011.555028
Neumann, J. Von, & Morgenstern, O. (1944). THEORY OF GAMES AND ECONOMIC BEHAVIOR. In Princeton University Press. Princeton University Press.
Patel, P. C., Li, M., & Park, H. D. (2018). A replication of Bowman’s paradox across 28 countries. Journal of Innovation and Knowledge, 3(3), 128–142. https://doi.org/10.1016/j.jik.2016.12.006
Putri, R. D. (2018). PENGUJIAN PROSPECT THEORY PADA PERUSAHAAN YANG TERDAFTAR DI BURSA EFEK INDONESIA. UNIVERSITAS GADJAH MADA.
Rieger, M. O., Wang, M., & Hens, T. (2011). Prospect Theory around the World. Norges Handelshoyskole, October.
Sajjad Nuir, R., & Asri, M. (2019). Bowman ’ s Paradox : Prospect-Theory-Based Risk-Return Relationship ( Some Recent Evidences in Indonesia ). Indonesian Capital Market Review 11, 11(January), 1–14.
Sinha, T. (1994). Prospect theory and the risk return association: Another look. Journal of Economic Behavior and Organization, 24(2), 225–231. https://doi.org/10.1016/0167-2681(94)90029-9
Soejono, F., & Heriyanto, H. (2018). Privatization and Firm Performance: a Study of Indonesia’s State-owned Enterprises. Jurnal Dinamika Manajemen, 9(2), 149–158. https://doi.org/10.15294/jdm.v9i2.14970
Tversky, A., & Kahneman, D. (1986). Rational Choice and The Framing of Decisions. The Journal of Business, 54(4), 251 – 278.
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Affiliations
Fernanda Alfian Rahman
UNIVERSITAS NEGERI SEMARANG
Arief Yulianto
UNIVERSITAS NEGERI SEMARANG
How to Cite
1.
Rahman F, Yulianto A. Problematic Firms Mostly Take More Risks? : Prospect Theory Testing in Indonesia. MAJ [Internet]. 9Sep.2021 [cited 27Sep.2024];10(2):233-42. Available from: https://journal.unnes.ac.id/sju/maj/article/view/49034
Problematic Firms Mostly Take More Risks? : Prospect Theory Testing in Indonesia
Vol 10 No 2 (2021): Management Analysis Journal
Submitted: Aug 12, 2021
Published: Sep 9, 2021
Abstract
Prospect Theory Kahneman & Tversky (1979) is a behavioral theory that discusses risk taking viewed under certain conditions, whether in a win or loss condition. There is inconsistent behavior between theory and reality in companies in Indonesia. This research method uses a quantitative approach with the object of research being all companies listed on the Indonesia Stock Exchange from 2010 to 2019. The sample selection uses a purposive sampling method. The sample used as many as 206 companies with 1614 observations. This research uses ANOVA data analysis technique. Based on the results of this study, it shows that prospect theory is not supported in this study