Investor behaviour and investment decisions: Evidence from Pakistan Stock Exchange

Main Article Content

Muhammad Ali
Nayeem ul Hassan Ansari
Bilal Ahmed Chishty
Chin-Hong Puah
Muhammad Ashfaq


This research aims to understand the influence of behavioural 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 issue being investigated in this study is how behavioural elements, such as sentiment, overconfidence, over- and under-reaction, and perceived market efficiency, affect investment choices made on the PSX, with a particular emphasis on the limited predictive power of herd behaviour. The sample data were analysed using partial least square-structural equation modelling (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 behaviour 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 behavioural factors and an investor’s investment decision in Pakistan. 

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How to Cite
Muhammad Ali, Nayeem ul Hassan Ansari, Bilal Ahmed Chishty, Chin-Hong Puah, & Muhammad Ashfaq. (2023). Investor behaviour and investment decisions: Evidence from Pakistan Stock Exchange. Asian Academy of Management Journal, 28(2), 1–28.
Original Articles


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