Determinants of subjective financial positioning and their implications for corporate finance

Abstract

Peer-based financial comparison represents a subtle but influential behavioural mechanism through which individuals evaluate their economic standing relative to others. While traditionally examined in consumer and behavioural finance research, this comparative dimension may also carry implications for corporate finance, as relative financial evaluations can shape decision-making patterns, motivation, and performance stability in competitive environments. Building on this perspective, the present study investigates behavioural and cognitive drivers of Peer Comparison (PC), a core dimension of the Multidimensional Subjective Financial Well-Being Scale (MSFWBS).

Using survey data collected from 93 first-year university students (aged 18–20), the study examines whether financial education and Big Five personality traits explain individual differences in peer-based financial evaluation. Personality was operationalised through Neuroticism, Extraversion, Openness, Agreeableness, and Conscientiousness, while financial education was treated as a proxy for cognitive financial capital. Multiple linear regression was employed to assess the joint and unique contribution of these determinants.

The findings indicate that peer-based financial comparison is not solely a function of objective financial knowledge, but is also systematically associated with behavioural predispositions. In particular, traits linked to social orientation and interpersonal exposure appear relevant for explaining variation in PC, while financial education shows a consistent directional relationship with lower reliance on social reference points. By integrating a multidimensional well-being framework with behavioural determinants, the study contributes to behavioural corporate finance research by highlighting how subjective financial evaluation processes may represent micro-level foundations for economically meaningful behaviour, with implications for organisational efficiency, performance stability, and workforce-related financial dynamics.