Högskolan i Skövde

Purpose

The purpose of this study is to gain an understanding of the different cognitive processes of buy-side and sell-side financial analysts and their use of investment beliefs and heuristics to mitigate risk and uncertainty when analyzing companies.

Design/methodology/approach

A mixed methods approach and a thematic analysis have been conducted based on 20 semistructured interviews with both buy-side and sell-side financial analysts. Using a think-aloud technique, the respondents formulated their thoughts aloud when analyzing a company and rated the importance of different financial and nonfinancial key measures along with their preferred analysis approaches, source preferences and information usage.

Findings

Buy-side and sell-side financial analysts share similar investment beliefs. Both perceive the stock market as irrational and unpredictable. Both groups also focus on companies’ nonfinancial information such as business models, ownership structure and governance while they distrust sustainability rankings. Buy-side analysts emphasized unpredictability and the limitations of expertise. Sell-side analysts focused on controlling corporate risks rather than reflecting on the limitations of the investment process to consider the systematic and inherent market risks. These differences are suggested to be explained by differences in scope and expertise – buy-side analysts being generalists and sell-side being specialists.

Originality/value

The present study is among the few that compares sell-side and buy-side financial analysts’ valuation processes by using semistructured interviews and a think-aloud approach. It shows that buy-side analysts share a skepticism toward sell-side analysts’ judgments and recommendations, and especially the credibility and validity of Environmental, Social and Governance issues (ESG) rankings. The study also reveals differences in cognitive approaches to valuation of companies.

The aim is to investigate the value basis of Socially Responsible Retirement Investments (SRRI) in a study of Swedish pension investors in the age range 18 to 65 years (N=1005). Logistic regression analyses were performed with self-reported SRRI choice as dependent variable and different levels of values as independent variables. On a higher level of analyses, self-transcendent values, especially universalism (e.g., equality, protecting the environment, and social justice), have the most important influences on SRRI choice. In contrast, on a lower-level analysis, SRRI choice is influenced by self-enhancement values with high priority for authoritarian power and low priority for wealth. The three-level analysis of values (self-transcendence vs self-enhancement value orientation, motivational domain, and value) questions the contradiction between dimension poles of values and the structuring of values in interrelated motivational domains. The results thereby clarify some previous findings and increase the understanding of the value basis of SRR

Purpose: The paper aims to investigate differences in non-professional and professional stock investors’ trust in and tendency to follow financial analysts’ buy and sell recommendations. Design/methodology/approach: Online experiment conducted in Sweden in March 2022 comparing non-professional private investors (n = 80), professional investors (n = 33), and master students in finance (n = 28). Information was presented about four company stocks listed on the New York stock exchange. Two stocks were buy-recommended and two stocks sell-recommended by financial analysts. For one stock of each type, the recommendation was presented to participants. Dependent variables were predictions of the stock price after three months, ratings of confidence in the predictions and choices of holding, buying or selling the stock. Ratings were also made of the importance of presented stock-related information as well as trust in analysts’ skill and integrity. Findings: More positive return predictions were made of buy-recommended than sell-recommended stocks. Non-professionals and to some degree finance students tended to trust financial analysts more than professional investors did and they were more influenced by the presentation of the buy recommendations. All groups made too optimistic return predictions, but the professionals were less confident in their predictions, more likely to sell the stocks and lost less on their investments. Originality/value: A new finding is that non-professional stock investors are more likely than professional stock investors to trust financial analysts and follow their recommendations. It suggests that financial analysts’ recommendations influence non-professional investors to take unmotivated investment risks. Non-professionals in the stock market should hence be advised to exercise more caution in following analysts’ recommendations. 

This article addresses the question of how public organizations with limited capacity manage to handle large scale crises. The case analyzed in this article is the sourcing of accommodation during the migration crisis in Sweden of 2015–2016. The event was a game-changer in Swedish migration policy following a more hesitant policy than before, even though new and substantial migration crisis have followed since then. Results show how the legal framework for procurements was not adapted for extraordinary events. The Swedish state was forced to pay exaggerated prices as private contractors took advantage of the acute demand. The study develops our theoretical understanding of the sourcing process during crises and show how the short-term perspective and uncertainties that characterize crises encourage both suppliers and procurers of services to act opportunistically. 

The present study aimed to explore the online shopping of medicines from demographic, geographic, psychographic, and behavioral factors. A quantitative survey design was used with a quote sample representing the Swedish population regarding age, gender, and residential area. In total, 1863 persons responded to a survey, including measures of age, gender, income, education, area of residence, personality traits (BFI-10), values (Rokeach Value Survey), self-estimated health-status, internet usage, online shopping in general, and online shopping of medicines. Firstly, the data were analyzed with chi-squares and independent t-tests. From these initial analyses, online shopping of medicines was associated with young age, female gender, high income and education, living in a big city, extraversion, several values of desirable end-states of existence (e.g., self-respect, a sense of accomplishment, and pleasure), internet usage, and general online shopping. Secondly, the significant (p < 0.05) variables from the initial analysis were included in a logistic regression analysis. This comprehensive model showed that online medication shoppers are best predicted by being female and the use of internet. Unlike what was previously known about medication shoppers, the typical online medication shopper appears to be driven by hedonistic values and self-actualization, rather than health status. We suggest that further research replicate this study outside and inside Sweden, and that health status is measured in a different way. 

Purpose: This paper aims to investigate whether loan officers' risk taking in credit decisions are associated with their personal financial risk preference and personality traits or solely with bank-contextual and loan-relevant factors. Design/methodology/approach: An online survey administered in six large Swedish banks to 163 loan officers responsible for assessing credit risk and approval of loan applications. The loan officers rated their likelihood of approving fictitious loan applications from business companies. Findings: The loan officers' credit risk taking is associated with bank-contextual factors, directly with perceived organizational credit risk norms and indirectly with self-confidence in assessing credit risks through attitude to credit risk taking. A direct association is also found with personal financial risk preference but not with personality traits. Research limitations/implications: Increased awareness of that loan officers' personal financial risk preference is associated with their credit risk taking in loan decisions but that the banks' risk policy has a stronger association. Banks' managements and boards should therefore assure that their credit risk policy is implemented, followed and being aligned with their performance incentives. Practical implications: Increased awareness of that loan officers' credit risk taking is associated with personal financial risk preference but more strongly with the banks' risk policy that motivate banks' managements and boards to assure that their credit risk policy is implemented, followed and being aligned with their performance incentives. Originality/value: The first study which directly compare the associations of loan officers' risk taking in credit approvals with personal risk preference and personality traits versus bank-contextual factors and loan-relevant information. 

The aim of this study is to contribute to the literature on how involuntary backsourcing in public organizations is performed in practice and how it affects the relationship between principal and agent. The study focuses on two questions: (1) Which stages characterize the process when public contracts are involuntary terminated? (2) How does involuntary backsourcing affect the relationship between principal and agent during the transfer period? The study's case concerns public backsourcing in Sweden, in particular, how a metropolitan municipality manages involuntary backsourcing. This study provides in-depth insights into backsourcing and its practice, as well as the degree to which the conflict dimension between the parties is affected. The study shows—paradoxically—that the relationship between principal and agent during the transition phase is characterized by dependence, mutual exchange of information, collaboration, and less conflict. The study contributes to developing the theory of backsourcing, particularly the behavior that is played out between principal and agent in the transition stage. The findings identify the need for public organizations which make outsourcing decisions to have contingency plans for bringing operations back in-house.

The aim of this study is to map the process involved in terminating a long-standing business relationship in a public context. It employed an exploratory study to interview 35 politicians, senior- and middle managers, ambulance- and dispatch centre staff and representatives of a regional alliance of patients. Growing criticism from a county council towards a contractor ended in a decision to bring services back in-house. However, terminating the contract failed and instead a state of quasi-backsourcing emerged. Only parts of the services were taken back in-house, with few reported benefits. The study suggests that caution is needed in relation to backsourcing services from a closely intertwined contractor.

This paper sets the stage for research on sustainable investment (SI) related to psychological well-being (PWB). It recognizes the threat of current global consumption levels to exceed the planetary boundaries and asks what roles financial markets may play in reducing these threats without compromising PWB. SI integrates environmental (E), social (S), and governance (G) factors alongside financial factors in investments in company shares and bonds as well as through active engagement in companies. Barriers to ESG integration include lower short-term financial performance, higher financial risks, and insufficient ESG screening by investors. A brief review of PWB shows that reliable and valid measurement methods have been developed, that the resulting measures complement economic and social national welfare indicators, and that health, sufficient material welfare, income equality, and non-material consumption are important determinants of PWB. The challenge is to globally reduce private material consumption levels in affluent countries. It is suggested that one role SI may play is in investing or actively engaging in companies that efficiently meet an increasing consumer demand of non-material consumption. Future research should address this role of SI. 

Local governments are bringing previously outsourced services back in-house. Research into explanations for sourcing decisions in the public sector is growing, however, few researchers have investigated drivers of both outsourcing and backsourcing in local public-governance organizations. In this study we utilize transaction cost economic theory (TCE) and political ideology to investigate underlying motives of sourcing in local public governance organizations. Based on a 2018 survey of chief financial officers (CEO) in all of Sweden's 290 municipalities, this study shows that backsourcing is strongly associated with outsourcing and that outsourcing and backsourcing should not be understood as opposite phenomena, rather as interdependent phenomena in a dynamic sourcing strategy. Outsourcing and backsourcing are driven in part by different factors: Outsourcing by political ambitions and economic factors relating to TCE, while managerial and pragmatic concerns are foregrounded for backsourcing.