Investment Behavior Research Articles

Application of International Telecommunication Union Recommendation L.1480 on measuring the greenhouse gas emission effects to a use case for photovoltaic power generation equipment

Abstract This article generalizes ITU-T Recommendation L.1480 ”Enabling the Net Zero transition: Assessing how the use of information and communication technology solutions impact greenhouse gas emissions of other sectors” by applying it to an action outside the Information and Communication Technology (ICT) field covered by this Recommendation, namely the use of a photovoltaic solar power plant in Poland, including the transition to scale. The study quantifies this use by accounting all greenhouse gases (GHG) emissions consequences (incl. installation, operation and maintenance) over the duration of the action (i.e. the supply and operation of the photovoltaic panels, inverter and associated services), through the construction of a consequence tree and observation of usage behaviors; it thus avoids pushing potentially negative effects outside the scope of the study, like rebound effects (ex.: increase of 10% in electricity consumption) or the consequences of the use of financial gains.
Three main innovations are shown:
• a step-by-step implementation of Recommendation L.1480 to a non-ICT sector,
• the effectiveness of the use of solar panels to reduce GHG emissions in Poland through actual measurement of usage data, in particular data linked to rebound effects,
• the possibility of generalizing this methodological framework to assess GHG emissions changes induced by any action already undertaken (ex post) or under consideration (ex ante).
By assessing all GHG emissions consequences and defining the steps for carrying out this assessment, L.1480 methodology covers all effects on a global scale and reflects real changes. It could thus be applied to assessing GHG emissions consequences of actions and decisions of various kinds: public policies (like carbon storage), corporate investment or household behavior. Moreover, adding other categories of environmental impact (biodiversity, scarcity of natural resources (metals, water), waste and pollution, radiative effect, etc.) would improve the exhaustiveness of effects measurement.

Sustainability and private investors

Private investors are an increasingly important voice in sustainability challenges. We examine investors’ attitudes and behavior toward sustainable investing through a survey of 5030 Finnish private investors. We document that 60 percent of all respondents consider environmental, social, and governance (ESG) factors when making investment decisions. Our results indicate that women and millennials are more likely to follow sustainable investment strategies than investors on average. We also find that language background, location, and education levels influence investment behavior. Moreover, our findings suggest that both sustainable and traditional investors are willing to take risks in their investment strategy. We also report the effects of the COVID pandemic on investor behavior and find that investors who started investing during the pandemic are less likely to choose traditional investment strategies. Our findings have implications for financial market participants and policymakers.

Impact of information disparity between individual investors on profits of meme stocks using an artificial market simulation approach

The growth of social media recently has made individual investors more reliant on online media for information. This trend significantly affects investor behavior and information disparity. For instance, social media can lead to the phenomenon of “meme stocks," in which stock prices rapidly rise and fall. Despite increasing interest in meme stocks, few studies have focused on the information disparity. In this study, we model meme stocks focusing on investors who are influenced by social network information, leading to information spread. We combine the Susceptible-Infectious-Recovered (SIR) model with a network model in an artificial market simulation to examine information disparity among individual investors. Our findings show that conventional investors generally profit, whereas social media investors incur losses. Additionally, the profits of social media investors are heavily affected by their network structure and their network distance from the information source. The results highlight the issue of information inequality in financial markets and offer important guidance for policymakers.

Unlocking the secrets of stock market investment behaviour: A comparative study among rural and urban investors in an emerging economy

This paper aims to determine how investors’ financial planning and investment intention mediate the relationship between attitude and investment behaviour in the stock market. This research contains two cross-sectional surveys on 386 rural (R) and 392 urban (U) investors through “partial least square-structural equation modelling (PLS-SEM)”. The outcomes exhibited that social influence significantly influences whereas perceived risk insignificantly influences financial attitude in both studies. Further, financial knowledge significantly influenced the financial attitude in Study U; however, it insignificantly influenced Study R. Further, the results exhibited that there is a substantial association exist between financial attitude, financial planning, investment intention and investment behaviour in both studies. Based on cumulative prospect theory, this unique and timely research contributes in the prior literature by delivering an in-depth understanding of why investors are hesitant to invest in stock market. The current article extends the academic literature with new conceptual insights that researchers have not studied earlier in developing nations.

Efficient Capital Market Theory and its Implications for Investment Decision Making in Financial Markets

The Efficient Capital Market (ECM) theory is an important foundation in the understanding of modern financial markets, which states that asset prices reflect all available information. This article aims to analyze the implications of ECM on investment decision-making, as well as explore the differences between passive and active investment strategies in the context of an efficient market. The method used is a literature review, which includes an analysis of previous research results on market efficiency and investor behavior. The results of the Efficient Capital Market (ECM) Theory study have a significant impact on investment decision-making in financial markets. By understanding that asset prices reflect all available information, both public and private, investors can be more prudent in choosing the right investment strategy. In an efficient market, passive investment approaches, such as index funds, are often more profitable compared to active strategies, given their lower costs and more manageable risks. The implications of these findings emphasize the importance of investors' understanding of ECM principles, which can help them adopt more rational and data-driven strategies, and avoid decisions influenced by emotions. Thus, ECM is not only an academic theory, but also a practical guide to improve investment decision-making in financial markets.

Overnight versus Intraday Momentum and Investor Heterogeneity: Evidence from the Korean Equity Market

I provide aheterogeneity-based explanation for robust overnight and intraday momentum, as well as offsetting cross-period reversals in the Korean equity market from 2014 to 2017, using investor-type trade flow data. I demonstrate that retail investors' attention-based trading on overnight returns and domestic institutions' arbitrage trading on intraday returns drive these relationships, employing Fama-Macbeth (1973) cross-sectional regressions. Finally, I show that the trading behavior of sentiment-prone retail investors weakens when overall market sentiment is pessimistic, particularly during down markets and financial crises. This study has significant implications for the literature on investor heterogeneity and stock prices.

The Role of Financial Literacy in Promoting Investment Behavior Among Young Adults

The Role of Financial Literacy in Promoting Investment Behavior Among Young Adults

The trichotomy of Needs Theory and irrational investor behavior through investor category: evidence from Sri Lanka

The trichotomy of Needs Theory has been applied in various studies to analyze psychological features across different professions. However, there is a notable gap in the literature regarding its impact on irrational investor behavior. This study presents a groundbreaking contribution by exploring how individual investors’ unique characteristics, defined by the trichotomy of Needs Theory, impact their stock market decisions. This research offers crucial, interdisciplinary insights into the psychological principles driving human behavior, making it significant for market analysts, investors, stockbrokers, and decision-makers. Utilizing David McClelland’s trichotomy of Needs Theory, the study assesses the behavioral aspects of individual investors. It investigates the impact of said theory on irrational investor behavior at the Colombo Stock Exchange, with the investor category as a moderator. Data was collected through a structured questionnaire from a sample of 386 investors at the Colombo Stock Exchange using systematic random sampling. Structural Equation Modeling was employed to test the hypotheses. The findings indicate that both the need for affiliation and the need for achievement significantly increase irrational investor behavior at the Colombo Stock Exchange. Further, the results embrace a significant positive moderation effect from the investor category on the relationship between the need for affiliation and irrational investor behavior. Moreover, the investor category positively impacts the relationship between the need for achievement and irrational investor behavior in the Colombo Stock Exchange.

Private equity renewable energy investments in India.

India is anticipated to grow its total energy consumption and CO2 emissions by more than any other country over the next two decades. India will have to attract around $400 billion in financing to realize its 500GW target of renewable energy by 2030. Given complex renewable energy sector risks, rapidly scaling-up risk-friendly private equity financing will be critical to achieve India's target. This research seeks to answer questions regarding the motivation, perceptions, strategies, and investment behavior of private equity investors in the Indian renewable energy sector. The answers to these questions presented herein have been distilled from primary research interviews with 40 executive-level sector practitioners and literature analysis. This research finds that global-macro forces and sector-specific appeal are attracting varied investors to the sector. These investors primarily deploy capital in existing developer platforms, creating control developer platforms, and Infrastructure Investment Trusts. Critical investment criteria and value creation strategies of these investors are comprehensively discussed. Emerging investment opportunities to create new renewable energy sector value by partnering with companies across the power sector value chain are also presented. This research concludes that despite significant sector risks, investors remain confident they can achieve outsized risk-adjusted returns relative to most other global infrastructure assets. This optimism stems from the confidence of investors in their own ability to manage risk-return dynamics through judicious investment selection and management strategies, the sector's uniquely large demand growth and market size, and the Indian central government's perceived strong commitment to finding creative solutions to chronic sector issues. Lessons from the investment insights, themes and factor analyses discussed herein can be drawn upon in evaluating renewable energy investments and policymaking worldwide.

What Factors Influence the Financial Risk Tolerance - A Further Examination on the Nexus Between Financial Risk Tolerance and Financial Environmental Factors

The consideration of risk tolerance plays a crucial role in the process of making optimal portfolio selections. In particular, the level of financial risk that an investor is willing to take, known as their financial risk tolerance (FRT), is sometimes regarded as the single most essential characteristic for the prediction of investor behaviour. In spite of this, it is a challenging endeavour since it is dependent on a wide variety of financial environment elements. For this reason, evaluating financial risk tolerance and identifying the elements that influence individual investors’ views of the financial risks they face have been interest of research and investigations for significant years. This study investigates the relationship between the financial risk tolerance of individual equity investors and financial environmental factors. For this purpose, four indicators namely “financial anxiety, money ethics, financial stress, and financial satisfaction” were used to check the impact of financial environmental determinants on FRT. The present study was executed in the state of Kerala, and the information was collected from individual retail investors through the use of a predesigned questionnaire. The Structural Equation Modelling (SEM) technique was utilised to evaluate the model. The results indicate that financial anxiety, money ethics, financial stress, and financial satisfaction exert significant positive effects on FRT. The findings of the current study may offer important assistance to state and national policymakers in the process of creating investment policies.

Alternative investment behavior of households during crises: The effects of the COVID-19 shock on gold purchases in India

Alternative investment behavior of households during crises: The effects of the COVID-19 shock on gold purchases in India

Influential factors of cybersecurity investment: A quantitative SEM analysis

In the dynamic landscape of digital enterprises, cybersecurity has emerged as a critical determinant of organizational effectiveness. This study delves into the intricate realm of cybersecurity investment within ASEAN organizations, exploring the key facets that drive decision-making in this domain. Using a quantitative approach through structural equation modeling (SEM), we conducted an in-depth analysis based on a sample of 419 enterprises meeting cybersecurity criteria. Our findings reveal that cybersecurity strategy, financial considerations, and institutional and regulatory conditions are the primary factors influencing cybersecurity investments in the ASEAN region. In particular, financial resources emerged as the most critical determinant, underscoring the importance of adequate funding to address evolving cyber threats. Furthermore, our study highlights the crucial role of institutional and regulatory frameworks in shaping investment behavior, indicating a heightened awareness among firms regarding compliance with legal requirements. By unpacking these dynamics, our research provides deep insights into the intricate interplay of factors shaping cybersecurity investments in ASEAN organizations. This study contributes to the discourse by emphasizing the imperative nature of understanding the impact of risk aversion, organizational structures, and long-term practices on cybersecurity resilience. The implications of our findings extend to policy making, innovation, and future research directions in the cybersecurity domain, offering valuable insights to improve cybersecurity preparedness and resilience against evolving cyber threats.

Elderly care burden and household investment behavior: The roles of family income, social security, and long-term care insurance

Elderly care burden and household investment behavior: The roles of family income, social security, and long-term care insurance

The resolution of excess investment in Fuzzy portfolio selection using piecewise linear function

Fuzzy portfolio selection on the guaranteed return rate has been proposed to study excess investment in different dimensions of risk preferences. However, the theory of behavioural finance proposes that the investment proportions of securities are not only determined by the intrinsic value of the security but also largely affected by the behaviour of investors. Therefore, the investment behaviour of an investor in the fuzzy portfolio selection should be considered in the excess investment for different securities at different return rates. In this study, we propose a piecewise linear function for the fuzzy expected return rates and use the new decision variables for investment proportion in each security. In addition, considering the investment behaviours of decision-makers, we use the concept of fuzzy contingent strategy to take into account the relationships of investment proportion among the securities in the fuzzy portfolio selection. Analysis results indicated that we can find the investment proportions in the portfolio with the possible results of shortage investment, full investment, or excess investments by the fuzzy constraint of total investment proportions. Finally, in the illustration with two experiments, investors could individually select the portfolio by the piecewise linear function in shortage investment, full investment, or excess investment.

DIVIDEND POLICY TO IMPROVE FIRM VALUE, FINANCIAL SUSTAINABILITY MODERATING VARIABLE

Many industries in Indonesia do not share profits in the form of dividends with investors, which affects the value of the company. This condition really determines the investor's decision to invest in the future as a reaction to the company's dividend policy. The study is aimed at analyzing the dividend policy in relation to investor behaviour and its impact on the value of a firm with financial stability as a moderate variable. This study uses 360 IDX-listed businesses from 2018 to 2022 for properties. Smart PLS was used to test the model. The study shows that the dividend policy affects the value of the company, but does not affect the behaviour of investors. However, financial stability has a negative impact on the dividend policy and the value of the company. In addition, financial stability cannot mitigate the relationship between the dividend policy and the value of the firm; Conversely, economic resilience can mitigate investor behavior and affect a firm's value. The article emphasizes that managers who develop dividend policy, that managers who develop dividend policy should pay attention to the behaviour of investors, as this can be a positive signal for the future value of the company.

Intelligent Designed Assistance Model to Evaluate the Role of Social Media Marketing in Promoting Investment in Mutual Funds in India

This research article explores the impact of social media marketing on promoting investment in mutual funds in India. With the increasing penetration of the internet and the rise of social media platforms, financial institutions are leveraging these channels to engage potential investors. The study investigates the effectiveness of social media marketing strategies in influencing investor behavior, awareness, and decision-making regarding mutual funds. A mixed-method approach was employed, including surveys and interviews with industry experts and investors. This paper explores the application of the Intelligent Designer Assistance System (IDAS) in mutual fund analysis, offering a comprehensive framework for evaluating mutual funds based on key financial metrics. IDAS integrates multiple parameters such as risk levels, return on investment (ROI), cost efficiency, volatility, Sharpe ratio, beta, fund size, and manager tenure, among others, to provide insights that assist investors in making informed decisions. Through the analysis of various fund types, including equity, bond, balanced, and sector funds, this study demonstrates how IDAS can tailor investment recommendations according to individual risk preferences and financial goals. The findings emphasize the importance of aligning investment strategies with factors like fund performance consistency, adaptability to market conditions, and overall cost-effectiveness. This approach enables investors to optimize their portfolios by selecting funds that best match their risk tolerance, return expectations, and sector interests, leading to more strategic and efficient investment choices. This paper investigates the role of social media marketing in promoting investments in New Fund Offers (NFOs) within the Indian mutual fund landscape. As financial institutions increasingly leverage social media platforms for marketing, understanding their effectiveness in influencing investor behavior becomes crucial. This study employs a mixed-method approach, including quantitative surveys and qualitative interviews, to analyze how social media impacts awareness, engagement, and investment decisions related to NFOs.

Attention to Israel’s war on Gaza and stock price behavior: evidence from the Tel Aviv market

PurposePublic interest in global events has become a robust driver of investor behavior and market dynamics. This paper assesses the potential influence of attention to the 2023 Israel–Palestine war on the Tel Aviv stock market performance. Our investigation includes both the aggregate market and major sectors.Design/methodology/approachLeveraging the Google Trends service, we track search interest for a rich list of 20 terms closely linked to the ongoing conflict. Subsequently, we employ principal component analysis to construct a proxy indicator for war-related attention. To examine the potential influence of this attention on stock price returns and volatility, we adopt an EGARCH-X(p, q) framework, incorporating proxy factors to mitigate potential model under-specification issues.FindingsThe results suggest that increased attention to Israel’s invasion of Gaza is associated with negative returns and heightened volatility across most sectors. Additionally, the finance and technology sectors appear to be the most vulnerable, whereas the industrials and real estate sectors show comparatively lower levels of impact.Practical implicationsGiven the observed negative effects of public attention to geopolitical conflicts on stock price dynamics, investors should consider incorporating geopolitical risk assessments into their investment strategies. Understanding how the Israel–Palestine conflict affects market behavior can help investors and fund managers make more informed decisions, including diversifying their asset portfolios to reduce risk or adjusting their positions in sectors most susceptible to such events.Originality/valueTo our best knowledge, this paper presents the first attempt to leverage the ongoing Israel–Palestine war as a compelling example to assess how public awareness of, and reactions to, interstate conflicts impinge on financial market returns and volatility.

Influence of Environmental, Social and Governance (ESG) in Investment Decision: Mediating Role of Investment Horizon

Purpose: The study investigates how Environmental, Social, and Governance (ESG) factors impact the investment choices made by individual investors in the stock market. Analyzing how ESG factors affect investors' decisions is the primary goal, and evaluating how each ESG factor affects these decisions separately comes in second. In the relationship between ESG and investment decision-making, the study also looks at the function of investment horizon as a mediating variable. Methodology: This study adopts a descriptive and causal-comparative research framework utilizing the theory of planned behavior and stakeholder theory. Structured questionnaires collected primary data from 423 active stock market investors. Key variables were evaluated using a 5-point Likert scale. The data were then examined using AMOS version 26's Structural Equation Modeling (SEM) to verify the theoretical relationships and investigate the interactions between the variables. Main Findings - The study found a strong and positive correlation between investment decision-making and Environmental, Social, and Governance (ESG) considerations. It also demonstrated the significant impact of ESG factors on investor behavior and decision-making by revealing how the investment horizon serves as a mediating factor, influencing the relationship between ESG factors and investment decisions. Applications - This study offers valuable insights for individual investors, aiding financial planning by identifying key ESG factors influencing investment decisions. It also provides guidance for SEBON and companies, supporting initiatives to promote ESG-focused investments, thereby aligning financial goals with sustainability objectives Novelty/ Originality - This study uses the investment horizon as a mediating variable to investigate how ESG factors affect investment decisions. It adds to conventional investment models by providing fresh perspectives on how long-term ESG factors affect financial planning. The study offers a framework for comprehending how portfolio strategies, particularly in emerging markets, are impacted by sustainable investment priorities.

Research on Population Aging, Effectiveness of Monetary Policy, and Real Estate Prices

As the global trend of population aging intensifies, the multifaceted impacts of aging on the economy are becoming increasingly apparent, especially in the areas of monetary policy and the real estate market. This paper aims to explore the intrinsic relationship between population aging, the effectiveness of monetary policy, and real estate prices. By analyzing the impact of demographic changes on consumption, savings, and investment behavior, the paper further reveals how aging affects the transmission mechanism of monetary policy and examines the role of monetary policy in real estate price fluctuations. The paper begins by defining the current status of population aging and discussing its broad economic impacts, followed by an analysis of the tools and transmission mechanisms of monetary policy and its specific effects on the real estate market. Based on the construction of a theoretical model, this paper also empirically tests the responses of the real estate market to monetary policy in different countries and regions facing aging societies. Finally, based on both theoretical and empirical research results, policy recommendations are made regarding the adjustment of monetary policy and regulation of the real estate market in the context of an aging society. This study provides theoretical support and practical guidance for policymakers to address the challenges that population aging brings to economic policy.

A study on how perceived risks of international students impact their Cryptocurrency investments

Cryptocurrencies have become one of the most disruptive financial innovations, attracting widespread interest worldwide. Despite their growing popularity, the risks associated with the use of cryptocurrencies remain a significant barrier to their adoption. Therefore, this paper examines the impact of perceived risks on international students’ cryptocurrency investment behavior. Results indicate that financial and regulatory risks are major barriers, while operational risks are less influential. Interestingly, security risks positively influence investment when perceived rewards or risk management capabilities are considered. Risk tolerance and cryptocurrency knowledge are strong positive predictors, highlighting the role of financial education in fostering adoption. The results suggest the implementation of specific policies that address perceived risk factors and improve financial literacy among younger generations of investors to support informed and responsible participation in cryptocurrency markets. Keywords: Cryptocurrency Investments, Perceived Risks, Investments Behavior.