This research project is a systematic review of the scholarly literature on the relationship between behavioral biases and investment decision-making in small and medium-sized enterprises (SMEs). Its main purpose is to identify, organize, and critically synthesize the existing body of knowledge on how cognitive, emotional, and judgment-related biases influence investment choices within SMEs. While investment decision-making has long been examined through rational and neoclassical perspectives, a growing stream of research suggests that such decisions are also shaped by bounded rationality, subjective perceptions, and systematic behavioral distortions. This review therefore seeks to provide a structured understanding of the extent to which behavioral explanations have been incorporated into the SME investment literature. More specifically, the project aims to answer several interrelated questions. First, it seeks to determine which behavioral biases have been most frequently documented in relation to SME investment decisions. Second, it aims to examine how these biases are theoretically framed and empirically measured across the literature. Third, it intends to assess the contexts in which these relationships have been studied, including sectoral, geographical, and methodological variations. Fourth, it seeks to identify the main mediating, moderating, and contextual factors that may strengthen, weaken, or explain the influence of behavioral biases on investment decision outcomes. Through this process, the review is expected to clarify conceptual overlaps, highlight inconsistencies in definitions and operationalizations, and identify areas where the evidence remains fragmented or underdeveloped. The expected outcomes of the project are both theoretical and practical. At the theoretical level, the review is expected to produce a comprehensive synthesis of the main behavioral biases associated with SME investment decision-making and to develop a clearer conceptual map of this research field. At the methodological level, it is expected to identify dominant research designs, measurement approaches, and recurring limitations in the literature. At the practical level, the review may offer useful insights for researchers, policymakers, SME support institutions, and business advisors by showing how non-rational mechanisms can affect investment choices and strategic allocation decisions in smaller firms. Overall, the project is expected to generate an evidence-based foundation for future empirical research and to support the development of more context-sensitive models of investment decision-making in SMEs.
Monssif RAHHALI (Thu,) studied this question.