PurposeThe purpose of this paper is to determine whether affective factors such as goal desires, positive anticipated emotions, anticipated regret and non-volitional actions like habits influence retail mutual fund investing.Design/methodology/approachUsing the model of goal-directed behavior (MGB), the impact of affective factors and habits was compared against a cognitively driven model. Data were collected through a survey of 321 mutual fund investors across India and analyzed using the partial least squares method.FindingsGoal-based desires were a significant driver of investing intentions while actual investing was driven by habits. Anticipated regret strongly influenced desires. The overall explanation of variance in intentions and investing behaviors was improved by 27 and 28% respectively by the new model.Research limitations/implicationsThe current investments in mutual funds is used as a proxy for future investing behaviors so results need to be interpreted accordingly. Future research directions could include the effects of mood, impact of language, religion and culture.Practical implicationsFor “emotionally complex” cultures, impact of emotive drivers and habits play a significant part in investing and fund houses need to orient their marketing accordingly.Social implicationsAwareness programs on how emotive issues and habits can hinder as well as enhance investment performance in markets would benefit retail investors.Originality/valueThe study is unique in analyzing affective and non-volitional factors and in showing that intentions are not sufficient to explain behaviors. It analyzes not just intentions as most studies do, but end behaviors of investors as well. It uses the MGB theoretical framework from behavioral psychology that has not been applied to financial behaviors before.
This empirical study investigates the symmetric and asymmetric dynamic correlations and volatility linkages between ASEAN-5 and the Indian equity markets. Granger causality test results reveal that bidirectional causal relation between the pairs of India-Indonesia, and India-Singapore. However, India-Phillippines and India-Thailand have a unidirectional causal relationship. Variance decomposition results show that India's equity market volatility contributes moderate fluctuations in the variance of Indonesia, Phillippines, Singapore Thailand. Finally, the Markov regime transition probabilities show that the high transition probabilities of p11 and p22 for India-Malaysia, India-Philippines and India-Thailand indicates a high degree of regime stability. The study on financial integration provides important inputs to investors in sharing risk internationally since restrictions on investment are removed. This study provides an essential insight to policymakers, portfolio managers, domestic and international investors, risk analysts and financial researchers in an emerging market.
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