Researchers from the University of Coimbra are studying the relationship between psychological characteristics of financial managers and financial decisions in small and medium-sized enterprises. The PSYCFIN project – Business Financial Decisions: A Psychological Approach, funded by the Foundation for Science and Technology, measures the effect of variables such as mindfulness and regulatory focus on strategic areas such as liquidity and debt policies.
Based on 449 questionnaires completed by managers responsible for the financial direction of SMEs in Portugal, the first results reveal that mindfulness plays an important role in liquidity retention. According to the project coordinator, Filipe Coelho, a faculty member at the UC Faculty of Economics and researcher at the Centre for Research in Economics and Management, financial decision-makers with higher levels of mindfulness present greater emotional regulation, lower impulsivity, and lower levels of overconfidence, characteristics that favor more measured and cautious decisions.
The study concludes that mindfulness reduces financial decision-makers' appetite for risk, resulting in a preference for greater liquidity and more conservative financial policies. This relationship is further reinforced in older companies, where the orientation toward stability facilitates the implementation of cautious decisions.
Filipe Coelho also notes that mindfulness has been associated with greater ethical awareness, which may reinforce concern for the protection of organizational resources and encourage more conservative financial management. The researcher concludes that the project contributes to a deeper understanding of how individual psychological characteristics influence business financial decisions.
