The Influence of Behavioral Finance on Corporate Performance Through Debt Decision Making (Study on Small and Medium Enterprises in Lombok Island)

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Siti Aisyah Hidayati
Sri Wahyulina
Embun Suryani

Abstract

This research aims to analyze: 1) The Influence of Overconfidence on debt decision making in SMEs, 2) The Influence of Overconfidence on corporate performance through debt decision making in SMEs, 3) The Influence of Illusion of control on debt decision making in SMEs, 4) The Influence of Illusion of control on corporate performance through debt decision making in SMEs, 5) The Influence of Availability on debt decision making in SMEs, 6) The Influence of Availability on corporate performance through debt decision making in SMEs, and 7) The Influence of debt decision making on corporate performance in SMEs. This research is an explanatory research with quantitative approach. The population in this research is all SMEs located in Lombok Island. The sample is selected by Non probability sampling technique with a judgment sampling method where the SMEs selected as samplesare the SMEs in handicraft industry of pottery and had already exporting the products. Of the existing population, there are 25 (twenty five) SMEs that can be sampled. The Respondents in this research are the financial managers who are also the owner of the SME. The Data was collected using questionnaire. To achieve research objectives and hypothesis testing, the obtained data is processed using Generalized Structured Component Analysis (GSCA) statistic tool. The results of this study indicate that Overconfidence and Availability have a significant effect on debt decision making in SMEs. Meanwhile, Illusion of control has no significant effect on SMEs’ decision making. Debt decision making has no significant effect on corporate performance in SMEs. Debt decision making is not an intervening variable, so the decision-making variable does not mediate Overconfidence, Illusion of control and Availability variables on corporate performance in SMEs.

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