Investor behaviour and investment decisions: Evidence from Pakistan Stock Exchange (early view)
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Abstract
This research aims to understand the influence of behavioral factors on investment decisions in the Pakistan Stock Exchange (PSX). This study gathered primary data using a survey-based questionnaire from 318 individual investors. The sample data were analyzed using partial least square - structural equation modeling (PLS-SEM) based approach. Results indicate that financial knowledge, sentiment, overconfidence, over and under-reaction and perceived market efficiency significantly affect the investment decision. Interestingly, herd behavior does not play a significant role in predicting investment decisions. However, we are certain that this study will provide a better understanding of the relationship between behavioral factors and an investor's investment decision in Pakistan.
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