Investor Perceptions Research Articles

EXPRESS: Investor Learning in Crowdfunded Supply Chain Finance Markets

Crowdfunded Supply Chain Finance (SCF) represents a novel market design that transforms financial flows within the SCF paradigm. It enables crowd investors to serve as financers, lending vital working capital to suppliers facing liquidity problems. A distinctive feature of this market is the mandatory involvement of loan guarantors, which facilitates repeated interactions between investors and fundraisers, potentially fostering investor learning. To understand how such learning dynamics shape investor decision-making, we develop a Bayesian learning model that conceptualizes investor perceptions of guarantor reliability as a subjective attitude underlying the perceived risk of a loan listing. The model posits that investors can learn about a guarantor’s reliability through a series of scheduled repayments involving the same guarantor over time. We consider investor decision-making a joint process comprising two interdependent components: (1) the incidence decision of whether to invest and (2) the amount decision of how much to invest. Our results reveal that investor perceptions of guarantor reliability play a crucial role in shaping both decisions, albeit in distinct ways. While perceived reliability exerts a positive, monotonic effect on amount decisions, its impact on incidence decisions follows an inverted U-shaped pattern. Furthermore, perceived reliability attenuates the positive effect of loan interest rates on both decisions, suggesting that the appeal of higher returns diminishes as investors’ reliability perceptions increase. A posterior analysis further shows that offering high interest rates may become counterproductive when perceived reliability is sufficiently high. These findings provide actionable implications for platform designers and participants in crowdfunded SCF markets.

PENGARUH GREEN ACCOUNTING, SOLVABILITAS, PERPUTARAN PIUTANG DAN PERPUTARAN PERSEDIAAN TERHADAP NILAI PERUSAHAAN PADA SUB SEKTOR PERTAMBANGAN YANG TERDAFTAR DI BURSA EFEK INDONESIA

The value of a company is crucial because it reflects the company's performance, which can influence investor perceptions. However, in the long term, a company should not only focus on its value but also consider environmental issues that can affect its sustainability. This study aims to examine the effect of Green Accounting, Solvency, Accounts Receivable Turnover, and Inventory Turnover on the Company Value in the Mining Sub-Sector listed on the Indonesia Stock Exchange (IDX). The population consists of all objects to be investigated, which in this study amounts to 62 companies in the mining sub-sector listed on the IDX. The sample used in this study includes 22 companies over a period of 3 years, resulting in a total of 66 research samples. The findings show that Green Accounting has a negative and insignificant effect on the company value, Debt to Equity Ratio has a positive and significant effect on company value, Accounts Receivable Turnover does not have a significant effect on company value, and Inventory Turnover has a positive and significant effect on company value. Meanwhile, simultaneously, Institutional Ownership, Return on Assets, Return on Equity, Green Accounting, Debt to Equity Ratio, Accounts Receivable Turnover, and Inventory Turnover all have a positive and significant effect on company value.

Investor Perceptions of the Corporate Alternative Minimum Tax

The Inflation Reduction Act establishes a new 15% corporate minimum tax on the adjusted financial accounting income for large U.S. corporations. Although the minimum tax is estimated to raise $222 billion over 10 years, some fear firms will manipulate their accounting earnings to reduce their tax liabilities, resulting in less revenue raised. Using an event study, we examine the extent to which investors believe this tax will reduce firm value. We examine stock market reactions around key legislative developments leading to the enactment of the book minimum tax. Our findings show targeted firms experience significantly lower stock returns than nontargeted firms during the enactment process (about 1.4%–1.8% of firm value). In aggregate, our findings are consistent with the Joint Committee on Taxation’s revenue estimates. In cross-sectional tests, we fail to find evidence that firms most likely to avoid the tax via earnings management experience more positive returns. We also fail to find less negative returns for firms most likely to pass on the tax to consumers. Overall, our results suggest investors do not expect firms to avoid this tax. Instead, they appear to expect a significant portion of the corporate minimum tax to be remitted by firms and borne by shareholders. This paper was accepted by Ranjani Krishnan, accounting. Funding: F. B. Gaertner acknowledges support from the Cynthia and Jay Ihlenfeld Professorship, M. Pflitsch acknowledges support of a postdoc fellowship of the German Academic Exchange Service (DAAD), S. O. Kelley gratefully acknowledges support from the James L. Henderson Chair, and J. L. Hoopes gratefully acknowledges support from the Harold Q. Langenderfer fellowship. Supplemental Material: The data files are available at https://doi.org/10.1287/mnsc.2024.04750 .

An Analysis the Arbitration (International Investment Disputes) Act, 2011 with Reference to the Protection of Foreign Investors in Pakistan

The Arbitration (International Investment Disputes) Act, 2011 and its relevance in safeguarding foreign investors in Pakistan. They cover the role of the legal systems as instruments for determining the investment disputes in order to enhance the secure investment environment. It also seeks to investigate the effects of the changed law on the protection of foreign investors in Pakistan. As for the method of conducting the work, the study relies on the decisions made within the doctrinal legal research approach, and the analysis of the legislation, the case law, and the articles on Arbitration Act. This approach assists in critically evaluating a number of aspects the practical and theoretical in this case. According to the research evidence presented herein, the Arbitration Act offers adequate legal shelter with an effective legal provision addressing the concerns of the investors while giving them a fair shot at uncontaminated arbitrations as envisaged by the legislation. Nonetheless, it suffers from constraints including enforcement delays, and inadequate transparency levels. On the basis of the findings of the given study, it is possible to name the following directions of the improvement of legislation: The efficiency of enforcement of arbitral awards should be increased and the transparency of the arbitration procedures should be enhanced. Any steps towards rectifying these problems may also improve legal environment of foreign investment in Pakistan. As it emerges from this research, although the Arbitration Act, 2011 provides the framework needed in safeguarding foreign investor in Pakistan, there is a need to make practical changes so as to focus on enforcing arbitral awards and increase the degree of transparency of the arbitral process. The study is also confined by scarcity of systematic empirical evidence on the actual experiences of arbitration under the Act. It is therefore necessary to do further research on the main topic of the enforcement of arbitral awards and investor perceptions to fill the current research gap.

A study on Investors perception towards State Bank of India Mutual Funds Puducherry

A study on Investors perception towards State Bank of India Mutual Funds Puducherry

Impacts of FinTech funding announcements on traditional banks: An event study analysis

This paper investigates how traditional banks' stock prices react to FinTech funding announcements, addressing a notable research gap. Using event study methodology with the MSCI index as a benchmark, we analyze stock price responses of European traditional banks from 2010 to 2019. Both parametric t-tests and non-parametric generalized sign tests are employed to assess the impact. Grounded in signaling theory, we hypothesize that FinTech funding events signal increased competition and strategic uncertainty, affecting investor perceptions of traditional banks. Our findings indicate that FinTech funding announcements significantly influence traditional bank stock prices, with digital lending FinTechs having a more substantial impact compared to digital capital raising and digital payment FinTechs. This study highlights the differentiated investor response to FinTech competition, providing insights into the strategic challenges and market dynamics between traditional financial institutions and FinTech startups.

Rumours From the Perspective of Malaysia Retail Investors: A Qualitative Study

This study explores the phenomenon of rumour dissemination within Malaysia’s retail investment sector, focusing on the social dynamics that influence the spread and impact of rumours among retail investors. Utilizing a qualitative approach, we conducted semi-structured interviews with participants aged 26 to 60, each possessing over ten years of retail investment experience, primarily from Malaysia’s Klang Valley. Thematic analysis was employed to interpret the data, revealing key factors that shape investor behaviour and market sentiment. Our findings identify three critical themes: individual traits and behaviours, organizational events, and the political climate. Personal factors, including individual experiences, motives, and beliefs, are central to how rumours form and spread, as they shape how investors interpret and share information within their networks. Investors' prior successes, failures, and motives for financial gain or social status drive these behaviours. Corporate events, such as key turning points, leadership changes, strategic decisions, and financial results, create ripple effects that influence both the organization’s performance and investor perceptions, often sparking speculation and rumour circulation. Furthermore, the political climate plays a significant role, as legislative changes, regulatory policies, and political stability affect the overall market environment. These socio-political factors shape investor sentiment and decision-making, adding layers of complexity to the spread and impact of market rumours. By applying the Gioia methodology, this study uncovers the complex interplay between these factors in rumour formation and dissemination. The research offers holistic insights into the socio-economic forces shaping retail investors’ behaviour in Malaysia, providing valuable contributions to understanding the role of rumours in market dynamics. Furthermore, it underscores the importance of socio-political elements in shaping investor perceptions, adding depth to the study of retail investment practices in Malaysia.

Investment Decision Behavior of Indian Retail Investors with Respect to IPOs

Retail investors consider time horizon, liquidity, risk, and return while making investing decisions in IPOs in order to achieve their financial goals. But limited financial literacy, information overload, emotional decision- making, lack of diversification, high transaction costs, and regulatory complexity are some of the difficulties Indian ordinary investors face while investing in IPO. Examining the variables influencing Indian retail investors' investment choices and decision-making procedures in IPOs is the primary purpose of this research. The researcher collected data from primary sources. The data was collected from 92 investors using a random sample method. The stated hypotheses were assessed at the 0.05 level of significance using the ANOVA test. Various aspects of IPOs, such as brand, profitability, financial standing, product offerings, size, industry track record, price bands, promoter track record, and risks, play an important role in forming investor perceptions on the basis of occupation. The result also states that there are significant differences in means of various groups of respondents on the basis of annual savings observed for the brand and reputation of the IPO-issuing company, while for other factors, there are no significant differences in means. Key Words: Investment Decision, Initial Public Offerings, Indian Retail Investors, Investment behaviour

Exploring the relationship between ESG Practices and Financial Performance of Vietnamese Companies

This study investigates the relationship between ESG practices and financial performance among the top 100 companies in Vietnam, as listed in the VN100 Index during 2017-2023. The authors use the Pooled OLS, Fixed Effects Model, and Random Effects Model approaches. The analysis reveals no statistically significant relationship between ESG and financial performance. The findings underscore the influence of traditional financial factors such as firm age, firm size, financial leverage, and economic growth rate, highlighting their importance in financial assessments. This paper adds to the increasing body of research on ESG performance in emerging markets by arguing that to promote deeper ESG integration, there is a need for increased regulatory support as well as investor education. The increasing influence of global sustainability norms necessitates an understanding of these dynamics within emerging markets such as Vietnam to align corporate strategies with investor expectations and international standards. Additional research is suggested to track how ESG factors affect financial performance as market conditions and investor perceptions shift.

The impact of sustainable development on the relevance of accounting information and financial activities: Evidence from Thailand.

This study investigates the impact of sustainable development on the relevance of accounting information and financial activities of companies listed on the Stock Exchange of Thailand (SET). The results reveal that earnings per share and book value per share have a positive effect on market value, implying that higher earnings signal strong financial performance, thereby attracting more investor interest. Short-term and long-term debt financing have a negative effect on market value, suggesting that debt financing leads to increased financial risk. Current asset and fixed asset investments have a positive effect on market value by signaling confidence in operational performance. Dividend payouts have a positive effect on market value, demonstrating a commitment to returning value to investors, resulting in a stronger firm reputation and investor perception. However, firms that adhere to sustainable development guidelines face more complex dynamics. The results show that both earnings per share and book value per share have a negative effect on market value, suggesting that while they report high earnings per share and book value per share, these financial metrics cannot alleviate investor skepticism regarding sustainability as a cost of the firm. Short-term debt financing has a positive effect on market value because it provides a flexible and efficient way to fund sustainable investments without diluting equity or incurring long-term debt obligations, while the implications of long-term debt financing and current asset investments are insignificant. Furthermore, the significant positive effect of fixed asset investment underscores the potential long-term benefits of sustainability, despite high initial costs. Lastly, the non-significant negative impact of dividend payouts on market value suggests that the overall effect may also depend on various factors. These results support the idea of efficient market theory, which posits that investors may have negative reactions to what they perceive as financial burdens, diminishing the importance of positive financial metrics and altering market value. This study recommends that policymakers should carefully design regulations and incentives to support sustainable investments. Such approaches may include establishing specific funds, tax incentives, subsidies, and soft loans. Additionally, policymakers need to promote transparency and consistent reporting on the long-term financial benefits of sustainability, which can help reduce investor skepticism and foster a more positive market response. Finally, firms should clearly communicate their long-term sustainability efforts and benefits to investors and various stakeholders, leading to a positive interpretation of the firm's commitment to sustainable development.

Evaluating the effect of investor culture on internal control reporting and investor perceptions of disclosure credibility

Investors expect internal control reports to improve disclosed information credibility by demonstrating effective risk management, compliance, and transparency. Investment culture influences these expectations by shaping risk perception, emphasizing long-term stability, and setting standards for corporate governance. Thus, investment culture emphasizes robust internal control to enable a more thorough evaluation of investment opportunities. This study examines the relationship between internal control reporting and investor perception of disclosure credibility mediated by investor culture. The survey approach involved 166 respondents from 57 Jordanian brokerage firms. The partial least squares (PLS) method was used for analysis. The results showed that investor perception of disclosure credibility was influenced by internal control reporting as PV 0.000 and that investor culture positively mediated between the two variables as PV 0.000. Investors thus rely on internal control reporting to ensure the credibility of disclosure and aid their investment decisions. This study provides foundational knowledge to policymakers to design successful internal control reporting policies and support systems. Acknowledgment I’m indebted to the University of Tabuk – KSA for the support of this article.

ANALISIS REAKSI PASAR ATAS PENGUMUMAN STOCK SPLIT SELAMA MASA PANDEMI COVID 19 (STUDI PADA PERUSAHAAN YANG TERDAFTAR DALAM BURSA EFEK INDONESIA)

This study looked at how the market responded to company announcements of stock splits made during the COVID-19 epidemic. This test was repeated since there were more prospective investors and many issuers divided their shares as a result of the COVID-19 epidemic, which increased the number of corporate activities. This study was.carried.out at the Indonesia Stock Exchange, and samples from 21 businesses were selected using a purposive sampling strategy and a.non probability sampling method. An event window of seven days is used in this investigation. The documentary methodology was employed in this study to collect data. Quantitative data was employed in this study, and secondary data sources were chosen as the type of data. The data analysis approach. According to the analysis's findings, there was a market response to the news of the stock split during the COVID-19 epidemic, as shown by abnormal returns. This demonstrates that company stock split announcements have a considerable beneficial informational impact on investor perceptions and decision making in the capital market. A company's shares are more liquid when there are more transactions on them.

Decision-Making Amid Economic Uncertainty: Exploring the Key Considerations of Commercial Property Investors

This study explored the key considerations of commercial property investors acting under conditions of economic uncertainty across the following three dimensions: market fundamentals, institutional, and behavioural factors. Over the past few decades, a series of exogenous shocks to the global economy has impacted property performance, investment volumes, and investor perceptions. Acknowledging that uncertainty further complicates investment decision-making, a mixed-methods research approach was adopted to examine the perspectives of 5 experts and 412 property investors. The findings revealed that, while most investors express negative responses to uncertainty and adopt more cautious attitudes, others are more aggressive and attempt to capitalise on emerging opportunities. Market fundamentals are not the only key consideration; access to information and investors’ behaviour all impact how decisions are made under these conditions. In particular, wealthy and more experienced investors make more comprehensive decisions, considering all three dimensions, while aggressive investors may disregard data in favour of intuition. Behavioural biases such as the bandwagon effect and fear of missing out (FOMO) all influence decisions and are sometimes exacerbated by media narratives. Practically, these considerations underscore the complexity of decision-making under conditions of uncertainty and how different investors attempt to navigate market volatility.

Do images help? The impact of proenvironment photographs and graphs in environmental disclosures on investor perceptions and willingness to invest

AbstractThis study investigates the effects of proenvironment photographs and graphs in environmental disclosures on potential investors' perceptions and willingness to invest, considering the moderating role of a company's environmental performance. An online experiment was conducted with experienced investors, where participants evaluated a hypothetical company with varying environmental performance outcomes (negative or positive) presented in different formats (text only, text with photographs, or text with graphs). The results indicate that proenvironment images enhance perceived environmental responsibility for companies with negative environmental performance, whereas processing fluency is improved when the image type aligns with environmental performance. Moreover, perceived environmental responsibility mediates the impact of images on the willingness to invest in negative performance contexts. In contrast, processing fluency mediates this effect for graphs in positive performance contexts. These findings offer guidance for company managers in effectively presenting environmental data and highlight the potential risks for policy‐makers regarding the misuse of images.

The Effect of Egyptian Investor Perceptions on a Firm's Worth

The Effect of Egyptian Investor Perceptions on a Firm's Worth

Investor Perception of Corporate Social Irresponsibility (CSiR) and Investing Decisions

The study examines a behavioral finance paradigm, where investors incorporate emotional/expressive and financial factors. The impact of emotional ties to the firm’s products and an expressive factor such as corporate social irresponsibility (CSiR) are examined to determine whether their investment decisions are based on them. We find that investors make decisions that are wealth maximizing as well as emotional/expressive. Moreover, we find that our respondents believe corporate profits should not come from using the cheapest labor nor from engaging in CSiR behavior, and they would be less likely to invest in such a firm.

The Effect of Net Profit on Cash Dividends and Stock Prices as Intervening Variables in Mining Sub-Sector Companies Listed on the Indonesia Stock Exchange 2018-2022

A positive increase in net profit can cause the stock price to rise, because this increase in stock price can affect investor perception and managerial decisions, including certainty regarding future dividend distribution. This study aims to assess the influence of net profit and cash dividends on stock prices as intevening variables. In this study, the data used is panel data, which is a combination of time series data and cross section data. The time series data used is 2018-2022. The population in this study is all mining sub-sector companies listed on the Indonesia stock exchange. The determination of the sample in this study was carried out using the purposive sampling method, with the main criterion of LQ45 index companies. The results of this study found that Net Profit has an effect on Cash Dividends, then Cash Dividends have an effect on Stock Prices.

CEO Pay Cuts and Investors’ Perceptions of Earnings Quality

SYNOPSIS The pay of a CEO is often cut in poorly performing firms to prod the CEO to work harder and restore profitability. Using earnings response coefficients (ERCs) as a proxy for investor perceptions of earnings quality, we find that ERCs decline following CEO pay cuts. Furthermore, firms with weaker oversight mechanisms and those subject to higher credibility concerns have a greater decline in ERCs following CEO pay cuts. We also offer weak evidence that credit rating agencies might perceive CEO pay cuts as impairing earnings quality. Our results suggest that pay cuts incentivize CEOs to boost earnings in the short run, and investors might perceive reported earnings as more likely to be opportunistic and of lower quality. A key implication of our study is that it provides evidence to support that the market views a CEO’s pay-cut status as vital information in appraising the earnings quality of a firm. Data Availability: The data that support the findings of this study are available from author Ting-Kai Chou upon request. JEL Classifications: G34; M41; M52.

Exploring Market Dynamics: A Qualitative Study on Asset Price Behavior, Market Efficiency, and Information Role in Investment Decisions in the Capital Market

This qualitative study explores market dynamics, asset pricing behavior, market efficiency, and the role of information in investment decisions within the financial markets. The research aims to provide insights into the underlying motivations, perceptions, and experiences of market participants, offering a comprehensive understanding of these complex phenomena. Employing qualitative methods such as semi-structured interviews and textual analysis, data was collected from a diverse range of participants including investors, financial analysts, and market regulators. The study found that market dynamics are influenced by various factors including investor sentiment, economic indicators, regulatory changes, and technological advancements. Behavioral biases among investors, such as herd mentality and overconfidence, challenge traditional theories like the efficient market hypothesis (EMH), indicating the presence of market inefficiencies. Moreover, information plays a central role in shaping investor perceptions and driving market trends, though concerns exist regarding the reliability of information sources in the era of social media and algorithmic trading. The study underscores the importance of investor education, diversified investment strategies, transparency, and regulatory interventions in fostering fair, efficient, and resilient financial markets. Moving forward, addressing these issues will be crucial for informed investment decision-making and advancing our understanding of financial market dynamics.

Investor attention and environmental performance of Chinese high-tech companies: the moderating effects of media attention and coverage sentiment

In the context of China’s rapid economic development, corporate pollutant emissions are increasing, underscoring the imperative for further enhancement of corporate environmental performance. Given the significance of high-tech enterprises in the environmental domain, this study examines the impact of investor attention on the corporate environmental performance of Chinese high-tech enterprises. This study utilized data from 463 high-tech enterprises in mainland China from 2011 to 2022 and employed the dynamic panel generalized method of moments (GMM) technique. The findings indicate that investor attention has a negative impact on the corporate environmental performance of high-tech enterprises. This research also finds that both media attention and coverage sentiment mitigate the negative relationship between investor attention and environmental performance of high-tech firms. Heterogeneity analysis reveals that in the sample of IT service industry, heightened media attention exacerbates the negative impact of investor attention on corporate environmental performance, and media coverage sentiment exhibits no significant moderating effect. Within samples of non-polluting and state-owned enterprises, increased media coverage sentiment amplifies the negative impact of investor attention on corporate environmental performance. This paper suggests that policymakers should foster a media environment that supports accurate and thorough environmental reporting while businesses should proactively engage with media to align investor perceptions with sustainable environmental practices.