Social ranking and delegated investments performance: exploring the mediating role of psychological capital

Purpose This study aims to explore the effects of social rankings on the performance of investment professionals under delegated investments. Additionally, it discovers the mediating role of psychological capital and investment decisions inferring that the social ranking makes investments’ performance possible with the intervening effects of psychological capital and investment decisions of investment professionals. Design/methodology/approach Conceptual model of the research has been empirically tested over a sample of 248 investment professionals. These professionals were selected through judgmental sampling because not all employees serving in the investment management industry are involved in investment decision-making. Therefore, a careful judgment was required to select real respondents. The responses are collected through structured closed-ended questionnaire and analyzed with the application of structural equation modeling using Smart PLS 4. Findings The findings of the study confirm full mediation of both psychological capital and investment decisions between social ranking and investment performance. Practical implications This study is expected to benefit investors for selecting the best professionals to manage their investments. It can potentially guide investment professionals on ways to enhance their performance. This research significantly contributes in achieving SDG 8. Originality/value The uniqueness of this research is its attempt to address the transformation of social capital into economic capital through psychological capital within delegated investments. It offers the solution to avoid negative consequences of social ranking via psychological capital. It makes another novel contribution in literature by linking the applications of agency theory and social comparison theory in the investment management industry of a developing economy.