Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/294369 
Year of Publication: 
2023
Citation: 
[Journal:] Cogent Business & Management [ISSN:] 2331-1975 [Volume:] 10 [Issue:] 1 [Article No.:] 2196785 [Year:] 2023 [Pages:] 1-22
Publisher: 
Taylor & Francis, Abingdon
Abstract: 
This research attempts to apply Image Theory to examine whether the tendency to continue the initial strategy or maintain the status quo known as escalation of commitment (EoC) from institutional investors leads to positive investment performance in unstable real environmental conditions with certain changing trends. In the equity market, investors are always faced with the option of maintaining their existing portfolio (initial strategy) or modifying it (generate emergent strategy) to increase assets as the goal. However, they have a tendency to EoC. Based on this situation, the authors conduct a quantitative study with covariance-based structural equation models (CB-SEM) approach one of the fund management industry in the Indonesian equity market during bearish conditions in the midst of the 2008 global economic crisis and bullish conditions during the crisis recovery as the background. This study shows that EoC is not always associated with more negative performance because it can result in more positive performance in high image compatibility state.
Subjects: 
decision-making
environment constraint
Escalation of commitment
image compatibility
investment strategy
stock market
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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