Investment Decisions Research Articles

Optimizing public investments: A Sustainable Economic, Environmental, and Social Investment Multi-criteria Decision Model (SEESIM)

One of the most important aspects for the economic and social growth of a country is high efficiency of public investments. This imperative has never been more critical, especially in the context of Europe and Italy, where the integration of environmental, economic, and social goals is essential to address the multifaceted challenges of the 21st century. This research introduces the Sustainable Economic, Environmental, and Social Investment Model (SEESIM), a novel multi-criteria decision-making framework designed to ensure the sustainability of projects as their validity over time, especially from a National Recovery and Resilience Plan perspective. Utilizing the Analytic Hierarchy Process (AHP), SEESIM integrates environmental, economic, and social criteria as useful tool to evaluate a project in the post-funding phase, ensuring a balanced approach to efficiency and sustainability. The model is adaptable to various regional contexts, providing a transparent and replicable methodology for assessing the impacts and costs of public investments. An experimental scenario demonstrates SEESIM’s utility in guiding investment decisions, highlighting its potential to significantly enhance the effectiveness of public resources in achieving long-term sustainability goals. SEESIM represents a pivotal advancement in sustainable development strategies, offering a comprehensive tool for integrating multi-dimensional sustainability criteria into public investment decisions.

Does climate policy uncertainty impair or improve corporate investment efficiency?

Climate policy uncertainty (CPU) has been a topical issue given its widespread impacts, but its effect on corporate investment efficiency is arguable. Based on a sample of Chinese listed firms, we find that higher CPU results in lower investment levels while higher investment sensitivity to investment opportunities. This suggests that CPU improves investment efficiency by pushing firms to reduce investment expenditures and align their investment decisions more in line with investment opportunities. We name this finding as the pushback effect of CPU and find that it is more pronounced for firms with overinvestment or tight financial conditions.

Impact of behavioral finance on financial decision making

This paper highlights the disproportionate effect of behavioral finance on investor’s investing decisions. While making any financial decisions, one easily gets influenced by psychological and emotional factors. Past individual experiences, tendency or opportunity for herd behavior, personal judgment, overconfidence in one's abilities, aversion to feelings of regret, reliance on advice from experts, and last but not least, something known as the disposition effect—by which investors tend to hold on to losing investments and professionally sell profitable ones too early. The impact of these factors on the investment decision-making process varies; on the one hand, they may enhance the quality of the decision-making process by aligning investments with risk tolerance and financial goals. However, on the other hand, behavioral factors can be a cause of inefficiency if investment decisions are based more on emotions than objective analysis. In our recent research, we questioned 187 investors, using a questionnaire from whom we acquired crucial information regarding the impact of behavioral finance on financial decisions. The primary objective of the questioning was to determine the effect of behavioral finance on financial decision-making. The secondary objective was to suggest some methods for making one aware of the repercussions of impulsive or emotional decision-making and making prudent investments.

A Critical Study of Psychology of Retail Investors

This research critically examines the psychology of retail investors, focusing on the behavioural finance approach to investment decision-making. Behavioral finance challenges the traditional assumption that investors are always rational, proposing instead that psychological, social, and cultural factors influence financial behaviours. The study aims to explore how demographic factors such as gender, age, and investment experience, along with macroeconomic conditions like interest rates and inflation, shape retail investors' decision-making processes. By analysing both quantitative and qualitative data from surveys and questionnaires, the study seeks to uncover patterns in how emotions, cognitive biases, and social networks affect investment choices across different groups. The scope of this research extends to identifying significant variations in investment behaviour based on demographics and cultural influences. Moreover, the study will test hypotheses related to gender differences in the influence of peers and interest rate changes on investment decisions. Through a mixed-methods approach, this research aspires to provide valuable insights for financial institutions and individual investors, enhancing their understanding of the psychological drivers behind market behaviour and investment strategies.

Agency conflicts, product market competition and investment efficiency: new evidence from emerging market

PurposeThis study examines the influence of product market competition on investment inefficiency of Indian firms in context of agency problems. Additionally, this study also investigates whether intense competition is a substitute for or complementary to corporate governance in reducing investment inefficiency of firms.Design/methodology/approachUtilizing the residuals extracted from Biddle et al. (2009) investment model, investment inefficiency, overinvestment and underinvestment are measured for 506 non-financial Indian listed firms with 6,998 firm-year observations from 2009 to 2022. Product market competition is measured using various proxies such as the Herfindahl–Hirschman index, top-four firm concentration ratio, total number of firms in industry, industry market size, weighted average of entry costs and research and development (R&D) to sales ratio. Firms' internal governance is measured using a newly corporate governance index developed with 65 new governance stipulations. Several pooled ordinary least squares (OLS) panel regressions were estimated involving investment inefficiency of firms, product market competition, governance index and firm-specific variables. Endogeneity issues were addressed through two-stage least squares. Robustness checks were also conducted using a two-step system generalized method of moments (GMM).FindingsThe main finding of the study indicates that heightened product market competition reduces investment inefficiency, overinvestment and underinvestment among the selected Indian firms suggesting that firms facing intense competition are less prone to invest below or above optimal levels. This is primarily because in highly competitive industries, managers face greater liquidation risks, prompting more efficient capital investment decisions. The results also indicate that robust corporate governance significantly mitigates investment inefficiencies in non-competitive industries compared to competitive ones suggesting heightened competition reduces managerial slack, resulting in diminished benefits from good governance in competitive settings. Overall results indicate a substitution effect between corporate governance and competition in reducing investment inefficiency, with robustness across various empirical specifications, industry classifications and alternative competition and inefficiency measures.Practical implicationsThe evidence from this work emphasizes the pivotal roles of market competitiveness and corporate governance in shaping investment efficiency. Regulators must closely monitor monopolistic behaviors to safeguard stakeholder interests, enhance investment efficiency and foster value creation. Recognizing the positive impact of market competition, firms should prioritize initiatives to promote industrial openness and intensify competition while strengthening market mechanisms. Policymakers should consider implementing competition-centric governance policies, such as deregulation and antitrust laws, to stimulate market competition. These measures can mitigate governance-related costs and promote a competitive marketplace.Originality/valueThis study provides fresh evidence concerning the effects of product market competition on investment efficiency of Indian firms under new governance norms, an unexplored area in India as most of the existing work has primarily examined the association between competition and investment levels. To best of our knowledge, this is one of the earliest studies demonstrating the substitution effects of competitiveness and governance systems on lowering investment inefficiency suggesting a significant influence of corporate governance in non-competitive industries. Finally, this study contributes to the field of methodology by developing a new firm-specific governance index based on 65 governance indicators.

The Influence of Personality Traits on Stock Investment Retention: Insights from Thai Investors

Understanding the psychological factors that influence investment decisions is crucial for predicting stock investment retention. This study investigates the mediating role of the Big Five personality traits in stock investment retention, utilizing a modified version of the theory of planned behavior. By examining the influence of investors’ perceived risk and attitudes toward stock investment, data collected via an online survey with The Association of Thai Securities Companies (ASCO) were analyzed using Structural Equation Modeling (SEM). The findings reveal that extraversion, openness, and conscientiousness significantly impact attitudes toward stock investing, which in turn affects investment retention. However, personality traits do not directly influence risk perception. This research provides unique empirical evidence of the independence between the Big Five personality traits and risk perception among Thai stock investors, underscoring the importance of personality in shaping investment behavior through its effect on attitudes.

Evaluating Financial Performance in the Indian Food Sector: A TOPSIS Approach to Company Assessment

When evaluating financial performance, industry-specific elements that have an influence on the food business are taken into account, including raw material costs, pricing dynamics, the competitive environment, regulatory environment, and consumer trends. When assessing a company's general health and future prospects, it is important to take these elements into account because they have an impact on its financial performance Over the years, India's food business has undergone substantial development and change, driven by factors including shifting customer tastes, urbanisation, and rising disposable income. The industry includes a number of subsectors, including restaurants, processed food, drinks, dairy products, and confectionery. Over the years, India's food business has undergone substantial development and change, driven by factors including shifting customer tastes, urbanisation, and rising disposable income. The industry includes a number of subsectors, including restaurants, processed food, drinks, dairy products, and confectionery. Investment Decisions: Evaluating the financial performance of food sector firms enables investors to make wise investment choices. Risk management: It's crucial to comprehend the financial status of businesses in the food sector. Industry Competitiveness: Analysing financial performance sheds light on the Indian food industry's competitive environment Government agencies and regulatory organisations can use financial performance assessments to develop policies and regulations that support the expansion and sustainability of the food sector. Sector Analysis: Evaluations of financial performance help with a more comprehensive study of the Indian food business. Investment Decisions: Evaluating the financial performance of food sector firms enables investors to make wise investment choices. Risk management: It's crucial to comprehend the financial status of businesses in the food sector. Industry Competitiveness: Analysing financial performance sheds light on the Indian food industry's competitive environment Government agencies and regulatory organisations can use financial performance assessments to develop policies and regulations that support the expansion and sustainability of the food sector. Sector Analysis: Evaluations of financial performance help with a more comprehensive study of the Indian food business. Alternative Parameter taken as Company 1, Company 2, Company 3, Company 4, Company 5, Company 6. Evaluation Parameter Net Profit Margin, Current Ratio, Debt Ratio, Debt to Equity. After doing topsis analysis company 2 has ranked 1 company 2 has ranked 6. TOPSIS method provides a systematic and comprehensive approach for evaluating alternatives based on multiple criteria. It considers both the positive and negative aspects of each alternative and helps decision makers in selecting the most suitable option based on their preferences and objectives.

Exploring the Impact of Employee Motivation on Investment Decisions: - A Study of Factors Influencing Mutual Fund Investment Among Corporate Employee

This study explores the impact of employee motivation on investment decisions, specifically focusing on the factors influencing mutual fund investments among corporate employees. As financial literacy and investment participation grow, understanding the underlying motivations that drive investment choices is crucial for both individuals and financial institutions. Utilizing a mixed-methods approach, we conducted surveys and in-depth interviews with corporate employees across various sectors. The findings reveal that intrinsic motivations, such as personal financial goals and career advancement, significantly influence mutual fund investment decisions. Additionally, extrinsic factors, including company-sponsored financial education programs and peer influence, play a critical role in shaping employees' investment behaviors. Our analysis indicates that motivated employees are more likely to engage in proactive financial planning and make informed investment choices. We also identified barriers such as risk aversion and lack of confidence in investment knowledge that hinder mutual fund participation. The implications of this study suggest that organizations should enhance employee motivation through targeted financial education initiatives and create a supportive investment culture. By doing so, companies can not only improve employee financial well-being but also foster a more engaged and motivated workforce. This research contributes to the existing literature on employee motivation and investment behavior, offering insights for corporate stakeholders and financial advisors aiming to enhance mutual fund investment strategies among employees.

The social ledger: qualitatively decoding interaction-driven investment decisions among Indian investors and fund managers

Purpose This study aims to investigate the antecedents of social interaction among Indian retail investors and fund managers to understand how these factors influence investment decisions. By identifying and examining these antecedents, the study aims to shed light on the social dynamics that shape investment behavior in the Indian financial market. Design/methodology/approach The researchers have mainly adopted an interpretive strategy for the present study. Qualitative data elicited through semistructured interviews with six retail investors and two fund managers were subjected to qualitative thematic analysis. Findings Our research found several factors that make Indian retail investors and fund managers connect and make financial decisions. Peers can improve a person’s investing performance through social facilitation, and discussing investment suggestions and lessons learned can affect a group’s investment behavior. Social norms also influenced investors’ financial decisions, demonstrating compliance. Investor closeness increased information sharing. Finally, the fear of missing out (FOMO), a psychological phenomenon where people fear missing out on rewarding experiences, encouraged social engagement as investors sought appealing prospects. Research limitations/implications The researchers interviewed eight carefully selected interviewees across the divide between retail investors and fund managers. Adopting other grouping criteria, conducting a focus group discussion with more respondents or adopting a mixed-methods approach may increase our understanding of the investment decision behaviors of Indian retail investors and fund managers. Practical implications The findings have far-reaching consequences, from deepening our knowledge of investors’ motivations and actions to directing individual savers, informing the development of financial literacy initiatives, influencing fund management practices and inspiring additional research in this study area. Originality/value This research, including retail investors and fund managers, significantly contributes to the literature on investment decisions and behavioral finance, particularly in the context of Indian investors and managers. This study’s unique perspective and comprehensive approach make it a valuable addition to the field, sparking interest and further exploration among academics, practitioners and investors alike.

“Exploring Sustainable Investment Frontiers: A Bibliometric Analysis on current trends and hurdles in incorporating ESG into Investment decision-making”

Integrating environmental, social, and governance (ESG) factors into investment decision-making has emerged as a critical area of interest in both academic and industry circles. This literature review aims to comprehensively explore and synthesize existing research on this topic by providing valuable insights into current trends, challenges, and prospects in sustainable investing. Articles, reports, and case studies published in relevant databases from 2019 to 2023 are reviewed for this research. A comprehensive search strategy encompassing keywords related to ESG integration in investment decisions has been used in the review process. The integration of ESG factors in investment decisions has evolved significantly in recent years. However, the knowledge landscape is scattered, and it is imperative to consolidate this body of research to gain a holistic understanding thus this bibliometric analysis addresses the research agenda on the impact of the integration of ESG factors on investment decision-making and the challenges and opportunities associated with this evolving paradigm. Our review highlighted that ESG integration has been shown to mitigate risk and enhance long-term returns, supporting the argument that sustainability considerations are not only ethical but also financially prudent. As per the analysis, hurdles range from the lack of awareness regarding standardized ESG metrics and reporting to concerns about greenwashing. The complexity of ESG factors and the need for robust data and analytics pose significant hurdles to investors and practitioners. The synthesis of findings from the study highlights the need for standardized ESG reporting, enhanced data quality, and increased stakeholder engagement. Future research should explore the integration of ESG factors in specific asset classes and regions, as well as investigate the effectiveness of various ESG integration strategies.

Psychological Determinants of Investment Decisions: Analyzing Financial Behavior in Personal Investments

Understanding the psychological factors that influence investor behavior is critical in the dynamic world of financial markets. Financial conduct encompasses the decisions and behaviors individuals exhibit in managing their finances, including investments in various asset classes. Factors such as risk tolerance, cognitive biases, emotional influences, and financial knowledge significantly shape investment outcomes. Gaining long-term financial success requires mastery over these behavioral aspects. This study investigates the influence of three psychological factors—information asymmetry, problem framing, and risk propensity—on the investment decisions of 220 active investors trading on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). A quantitative research approach was employed, utilizing a structured questionnaire to collect data. Statistical analyses, including regression and correlation analysis, were used to assess the relationships between these psychological variables and investment behaviors. The results reveal significant correlations between psychological factors and investment decisions. Information asymmetry, problem framing, and risk propensity were found to strongly influence individual investor choices. These findings shed light on the intricate role that cognitive biases and psychological processes play in shaping financial decision-making. The study's findings offer valuable insights into the psychological drivers behind investment behavior. By highlighting the impact of these factors, the research contributes to both academic understanding and practical applications for financial professionals. The results underscore the importance of enhancing financial literacy and investor education, enabling more informed decision-making and promoting improved financial outcomes.

A Financial Analysis and Valuation of Pfizer

Abstract: The rational valuation of the healthcare industry and the analysis and research of the financial risks faced by enterprises can not only provide a basis for rational investment and transaction pricing decisions, but also help enterprises to find out the shortcomings of the production and operation, so as to improve the management mode of the enterprise, and help enterprises to achieve the maximisation of management. Firstly, this paper analyse the risks faced by Pfizer from a financial point of view by quantitatively comparing the data of Pfizer and its two competitors, Amgen and Unitedhealth Group, and then qualitatively analysing their characteristics in terms of liquidity, solvency and profitability and the reasons for this. Next, Pfizer is valued by looking at its leverage, business risk, earnings per share, etc. to measure the financial risk of the business and the reasons for the capital structure. It then gives investors an objective investment recommendation by forecasting Pfizer's future share price. The study concludes that Pfizer Inc. is illiquid, has poor corporate solvency, is at risk of debt servicing, and has suffered a significant decline in profitability. Valuing Pfizer, the forecast suggests that Pfizer's stock is currently undervalued.

Research on Portfolio Investment in the Risky U.S. Stock Market Based on the Mean-Variance Model

Abstract: Against the backdrop of a thriving securities market and economy, there is a growing demand among investors for stock portfolio models in risky markets. This paper explores the application of the mean-variance model in this context, aiming to assist investors in making more informed investment decisions in an uncertain market. Through an in-depth analysis of the mean-variance model, the main conclusion of this paper is that certain stocks, such as AAPL, receive a higher investment proportion due to their lower risk and stable expected returns. In contrast, some high-risk or low-expected-return stocks, such as SBUX, MSFT, and QCOM, hold a smaller or zero proportion in the portfolio. This conclusion highlights the importance of balancing risk and return when constructing a portfolio and provides investors with specific asset allocation recommendations. It can help them effectively control risk while pursuing maximum returns, thereby achieving long-term stable investment gains.

Relationship Between ESG and Corporate Innovation Investment - Based by A-share Listed Companies

Abstract: ESG criteria are pivotal factors in assessing corporate performance, influencing not only a company's social reputation and investor trust but also its innovation investment decisions. Recognizing the crucial role of innovation in enterprise growth and its linkage to ESG factors, This essay examines the association between company innovation investments and ESG levels objectively. Utilizing China's A-shares as the research sample, an empirical analysis is conducted through a linear regression model. The findings conclusively reveal a notable correlation between ESG performance and the level of enterprise innovation investments. Specifically, companies with stronger ESG performance tend to invest more heavily in R&D and innovation. Conversely, enterprises with higher levels of R&D and innovation often exhibit superior ESG standards. This study underscores the mutual reinforcement between ESG practices and corporate innovation, emphasizing the importance of integrating ESG considerations into business strategies for sustainable growth and innovation.

The Impact of ESG Standards and Investment : Global Trends and Practices

In recent years, ESG (Environmental, Social, and Governance) investment has significantly integrated into investment strategies worldwide. The concept of ESG investing is not merely a fleeting trend but rather an essential tool for investors looking towards sustainable and responsible investment practices. With the evolution and adoption of ESG investments in the global market, a thorough examination of ESG investment practices reveals valuable insights. Nowadays, in economic landscape, the emphasis on ESG factors in investment decisions continues to grow, underscoring the importance of responsible investing practices in fostering long-term value creation and societal impact. This study offers noteworthy recommendations regarding ESG investment standards, aiming to drive improved ESG performance within enterprises. By adhering to robust ESG criteria, organizations can access enhanced financial prospects, paving the way for them to garner increased social recognition. Besides, this paper also put forward countermeasures and suggestions for China's ESG to improve China's ESG information disclosure system and the awareness of ESG.

Research on the Feasibility of Machine Learning Methods in Stock Price Prediction

Abstract: Stock price prediction has always been an important topic in financial research. Accurate price prediction can not only help investors make informed investment decisions but also enhance market stability and reduce systemic risk. In recent years, with advancements in computing technology and data science, machine learning methods have been increasingly applied in the financial field. Compared to traditional methods, machine learning methods can better handle high-dimensional, nonlinear, and large datasets, thus demonstrating higher prediction accuracy and applicability in stock price prediction.This paper reviews relevant literature and selects five models for empirical research: Support Vector Machine (SVM), Long Short-Term Memory network (LSTM), LightGBM, a combination of LSTM and LightGBM, and Convolutional Neural Network (CNN). The effectiveness of these models in predicting the stock price of Meituan-W (3690) was analyzed and compared in detail. The experimental results show that the LightGBM model performs best in terms of Mean Squared Error (MSE), Mean Absolute Error (MAE), and Root Mean Squared Error (RMSE), proving its significant advantages in handling large-scale, high-dimensional, and nonlinear data. By comparing the prediction results of different models, this paper explores the strengths and weaknesses of each model and their feasibility and effectiveness in practical applications. Machine learning methods have significant potential in stock price prediction, model selection needs to comprehensively consider data characteristics, computational resources, and practical application scenarios.

The Respective Relationship Between Environmental, Social, Governance and Financial Performance

Based on data from most A-listed Chinese corporations from the China Stock Market & Accounting Research (CSMAR) database in 2023, this study examines the respective influence of Environmental, Social, and Governance (ESG) performance on a corporations financial performance. By utilizing Ordinary Least Squares (OLS) regression models, the study regards return on equity (ROE) as the dependent variable and E, S, and G scores as the independent variable. It delves into the individual contributions of each ESG category to provide investors with a more detailed framework for making investment decisions and offer corporate executors insights into policy implementation to improve profitability. Ultimately, aiming to support both investors and corporate leaders in their efforts to improve financial outcomes through targeted ESG initiatives, this research indicates that among three factors, the governance performance of a corporation can, to the most extent, enhance financial performance, and thereby encourages corporations to prioritize governance in their ESG strategies.

Assessing the Impact of Technology on the Efficiency and Effectiveness of Investment Banking Services

This paper evaluates the effect of innovation on the effectiveness and adequacy of venture managing an account administrations. It reflects on the way digital innovations such as artificial intelligence, blockchain, and data management systems have transformed such missions as securities underwriting, mergers and acquisitions, and client advisory services. By combining these technologies, investment banks optimize their processes, improve precision, and bring in enhanced customer experiences. Deliberating through critical review of literature and specific cases from the industry, this paper explores how artificial intelligence changes the decision-making processes, automates trading strategies, and enhances risk management, while blockchain changes back-office operations by making transactions faster and more secure. Advanced data management tools equally provide improved insight into the enhanced client services and decisions in investments for the banks. Although this brings cost-cutting and operational efficiency, these technologies pose challenges in cybersecurity and regulatory compliance due to the expansion of digital platforms, which provide increased opportunities for cyber-attacks and a need for strict adherence to ever-changing regulations. The paper provides a panoramic view of the current and future role of technology in evolving investment banking.

Factors Affecting Stock Investment by Individual Investors on the Indonesia Stock Exchange

This study aims to examine the factors that influence individual investors in investing in stocks on the Indonesia Stock Exchange. The factors studied and suspected of influencing individual investor decisions are financial literacy, risk perception and herding behavior. The study also examines the effect of financial literacy on risk perception. The population in this study were college students in Yogyakarta who had invested in the Indonesia Stock Exchange. Respondents were focused on students of the Islamic University of Indonesia with a total of 115 students taken using convenience sampling and snowball sampling techniques. To test the hypothesis, the researcher used a structural equation model analysis tool with the Smart PLS program. The results of the study indicate that financial literacy, risk perception have a positive effect on investment decisions. However, herding behavior does not affect investment decisions, while financial literacy also affects risk perception.

Holy grail or convenient excuse? Stakeholder perspectives on the role of health system strengthening evaluation in global health resource allocation

BackgroundThe role of evaluation evidence in guiding health systems strengthening (HSS) investments at the global-level remains contested. A lack of rigorous impact evaluations is viewed by some as an obstacle to scaling resources. However, others suggest that power dynamics and knowledge hierarchies continue to shape perceptions of rigor and acceptability in HSS evaluations. This debate has had major implications on HSS resource allocation in global-level funding decisions. Yet, few studies have examined the relationship between HSS evaluation evidence and prioritization of HSS. In this paper, we explore the perspectives of key global health stakeholders, specifically around the nature of evidence sought regarding HSS and its potential impact on prioritization, the challenges in securing such evidence, and the drivers of intra- and inter-organizational divergences. We conducted a stakeholder analysis, drawing on 25 interviews with senior representatives of major global health organizations, and utilized inductive approaches to data analysis to develop themes.ResultsOur analysis suggests an intractable challenge at the heart of the relationship between HSS evaluations and prioritization. A lack of evidence was used as a reason for limited investments by some respondents, citing their belief that HSS was an unproven and potentially risky investment which is driven by the philosophy of HSS advocates rather than evidence. The same respondents also noted that the ‘holy grail’ of evaluation evidence that they sought would be rigorous studies that assess the impact of investments on health outcomes and financial accountability, and believed that methodological innovations to deliver this have not occurred. Conversely, others held HSS as a cross-cutting principle across global health investment decisions, and felt that the type of evidence sought by some funders is unachievable and not necessary – an ‘elusive quest’ – given methodological challenges in establishing causality and attribution. In their view, evidence would not change perspectives in favor of HSS investments, and evidence gaps were used as a ‘convenient excuse’. Respondents raised additional concerns regarding the design, dissemination and translation of HSS evaluation evidence.ConclusionsOngoing debates about the need for stronger evidence on HSS are often conducted at cross-purposes. Acknowledging and navigating these differing perspectives on HSS evaluation may help break the gridlock and find a more productive way forward.