Impact of Behavioral Biases on Investment Decision-Making of Women Entrepreneurs: A Conceptual Review

Abstract

This study aims to explore the influence of behavioral biases on the investment decision-making process of women entrepreneurs. Despite the increasing participation of women in entrepreneurship, they face unique challenges that affect their financial decision-making, including socio-cultural pressures, work-life imbalance, and limited access to financial resources. Through a conceptual analysis of existing literature, the research identifies key behavioral biases such as overconfidence, loss aversion, anchoring, herding, which significantly impact investment choices among female entrepreneurs. The findings suggest that these biases are shaped by antecedent factors, including socio-cultural norms, work-life imbalance, stress and personality traits, and are moderated by financial literacy, entrepreneurial experience, and risk tolerance. The proposed conceptual framework illustrates the interplay between these biases and antecedent factors, emphasising that investment decisions are not purely rational but are shaped by cognitive and emotional factors. The study highlights the importance of targeted interventions, such as enhancing financial literacy and providing mentorship, to empower women entrepreneurs in making informed investment decisions. By addressing the behavioral biases that hinder their investment strategies, this research contributes to the broader discourse on women’s entrepreneurship and economic development, offering insights for policymakers and support organizations aimed at fostering sustainable growth in women-led businesses. Future research directions are suggested to further investigate the nuances of behavioral biases in varied contexts.