Success of researchers from the Faculty of Economics, University of Sarajevo

The results of the research conducted as part of the master's thesis of Adna Omanović, MA, under the mentorship of Prof. Dr. Azra Zaimović, defended at the Faculty of Economics, University of Sarajevo in 2022, were published in the paper entitled The determinants of financial risk tolerance and portfolio allocation: Have the Covid-19 pandemic and the Ukraine war affected our risk tolerance? in the journal Borsa Istanbul Review (Q1, SSCI, Impact Factor 6.3, Acceptance rate 8%). The publisher of the journal is Elsevier, and the journal ranks 11th in the Web of Science – SSCI Finance category (top 5%).

The paper provides an analysis of the key factors that shape the level of financial risk tolerance and portfolio allocation decisions in a sample of adults in Bosnia and Herzegovina, with a special focus on the impact of the Covid-19 pandemic and the Russian invasion of Ukraine. By combining subjective and objective measures of financial risk tolerance, the research reveals that risk attitudes, as well as practical investment knowledge and experience, are key predictors of financial risk tolerance, surpassing the influence of formal education.

One of the main contributions of this research is the realization that global crises significantly affect subjective financial risk tolerance, but do not affect objective measures of financial risk tolerance. The Russian invasion of Ukraine had a significantly greater impact on subjective measures of financial risk tolerance than the Covid-19 pandemic, which had an almost negligible impact. Investors’ focus during the pandemic was on preserving portfolio stability, fleeing to safe investments such as gold and real estate. On the other hand, neither the Covid-19 pandemic nor the Russian invasion of Ukraine had a significant impact on the allocation of risky assets in investors’ portfolios, which is in line with the dominant investment preferences in Bosnia and Herzegovina, which include savings, life insurance and real estate investments. These results offer valuable insights into understanding the financial behavior of investors in emerging economies, especially in times of crisis.

The paper is available online via the Borsa Istanbul Review journal link: https://doi.org/10.1016/j.bir.2024.11.001