Credit rating and managerial behavior in investment decision making: Evidence from the Korean market

Kim, Seonhyeon; Thompson, Ephraim Kwashie; Kim, Changki

doi:10.1016/j.jbef.2023.100791

Cited by 5 publications

(4 citation statements)

References 55 publications

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“…The propensity to base judgments on generalizations and stereotypes rather than information is representative of prejudice (Tversky & Kahneman, 1974). In several areas, including financial decision-making, it has been discovered that EB is a strong predictor of rational decision-making (Kim & Lee, 2018;Kohler et al, 2019). By undervaluing emotions and emphasizing factual facts more, it is believed that ES will lessen the impact of behavioral biases on investment decisions (Kohler et al, 2019).…”

Section: Literature Reviewmentioning

confidence: 99%

The Influence of Behavioral Biases on Investment Decisions; Moderating Role of Emotional Stability

Imran Gulzar

2023

JDSS

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This study examines how six behavioral biases (availability bias, self-control bias, overconfidence bias, prejudice an illusion of control, and representative prejudice) affect investing decisions moderated by emotional Stability. The study employs a theoretical model based on behavioral finance theories and a hypothetic-deductive methodology. Demographic information of 237 active traders on the stock exchange has been examined through quantitative research utilizing SmartPLS 4. The findings construct validity as all items have a loading value >0.60. The proposed model was tested in the study using a twostep process. First, reflective measurement models were used to test the measurement model, and Partial Least Squares (PLS) were employed to analyze the data. The structural relationships between the variables were then examined using structural equation modeling (SEM). The findings revealed that all variables explained 37.53% of the overall variance, indicating no significant issues with friction from the usual technique. The study's findings suggest that behavioral biases considerably influence investment choices and that emotional Stability moderates this relationship.

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Section: Literature Reviewmentioning

confidence: 99%

The Influence of Behavioral Biases on Investment Decisions; Moderating Role of Emotional Stability

Imran Gulzar

2023

JDSS

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“…Precisely, behavioral finance is a field that seeks to explain psychological and cognitive elements that influence actions of investors. Less research has been done on how overconfidence, disposition effect, risk-aversion partiality, and herding behavior affect investment decisions in Pakistan (Kim, Thompson & Kim, 2023;Widyatama & Narsa, 2023). The shortcomings of the literature exploring the impact of behavioral biases and investment decisions on investor decision-making in Pakistani context are numerous.…”

Section: Introductionmentioning

confidence: 99%

The Investment Decision-Making: Understanding Overconfidence, Herding and Risk Aversion Among Individual Investors

Zafar,

Ashraf,

Raza

2024

JSSD

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The main objective of present study is to analyze impact of overconfidence, herding behavior, disposition effect & risk aversion on investment decisions made by investors. The study's population comprises individual investors who engage in investments within the Pakistan Stock Exchange. The study's sample comprises 365 individual investors who participate in the Pakistan stock exchange over survey questionnaire. The results are analyzed using a structural equation model by researcher. The findings of this study suggest that there exists a statistically significant and positive correlation between the overconfidence, herding behavior, disposition effect, and risk aversion in relation to investors' decision-making regarding their investments. Current work offers novelty by unveiling complex interplay of psychological biases and risk preferences in determining investment decisions. The study focus is narrowed down to individual investors on PSE and paves way for exploration of future research, like, investigating same phenomena among institutional investors to enhance the inclusiveness of observed variables as well as their relationship.

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“…The behavioral finance has attracted considerable attention in recent times, as it concentrates on understanding the psychological and cognitive factors that impact decision-making of investors. Collective influence of behavioral biases such as overconfidence, disposition effect, risk-aversion bias, and herding behavior on investment decision-making within the Pakistani context has yet to be extensively investigated (Kim, Thompson & Kim, 2023;Widyatama & Narsa, 2023). Moreover, potential moderating effect of financial literacy in alleviating adverse impacts of these biases has not been thoroughly investigated in literature.…”

Section: Introductionmentioning

confidence: 99%

UNLOCKING THE INVESTMENT PUZZLE: THE INFLUENCE OF BEHAVIORAL BIASES & MODERATING ROLE OF FINANCIAL LITERACY

Khan,

Hassan,

Islam

2023

JSRD

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This study aims to investigate the influence of behavioral biases on investors' investment decisions and explore the moderating role of financial literacy in this relationship. Research adopts quantitative approach, utilizing a survey questionnaire distributed among a sample of individual investors actively trading in Pakistan stock exchange. Survey assesses prominent behavioral biases like overconfidence, disposition effect, risk-aversion bias, and herding behavior, while measuring participants' level of financial literacy. Findings of study proves significant impact of behavioral biases on investors' decisions. Respondents validate prevalence of shared biases, including overconfidence, disposition effect, risk-aversion bias, and herding behavior. These biases tend to influence the decision-making process of investors, leading to suboptimal investment choices. Results suggest that financial literacy plays moderating role in linking behavioral biases and investment decisions. The implications of findings suggest importance of promoting financial literacy amid investors over guidance and support of financial professionals, ultimately improving quality of investment decision-making.

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Credit rating and managerial behavior in investment decision making: Evidence from the Korean market

Cited by 5 publications

References 55 publications

The Influence of Behavioral Biases on Investment Decisions; Moderating Role of Emotional Stability

The Influence of Behavioral Biases on Investment Decisions; Moderating Role of Emotional Stability

The Investment Decision-Making: Understanding Overconfidence, Herding and Risk Aversion Among Individual Investors

UNLOCKING THE INVESTMENT PUZZLE: THE INFLUENCE OF BEHAVIORAL BIASES & MODERATING ROLE OF FINANCIAL LITERACY

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