Determinant factors of investors� behavior in investment decision in Indonesian capital markets

Abstract

This study examines the effect of financial information, macro environment, and subjective norms on investors behavior when making investment decisions in Indonesian capital market. It was conducted by a survey design and involved 190 individual investors in three big cities in Indonesia (Jakarta, Surabaya, and Bandung). By using Structural Equation Modeling with Warp-PLS 3.0, the results showed that macro factors had a significantly positive effect on the technical information, the financial information and the macro factors had a significantly positive effect on the investor intentions, and the intentions of investors and the financial information had a significantly positive impact on investment decisions. It was also found that the financial information held a great contribution to build investor intentions and investment decisions. Thus, Indonesian individual investors were rational and sophisticated investors. They were not influenced by the actions of other investors, analyst opinions, and media. The implication of this research was how to provide information comprehensively to investors, which was very important to influence their decisions.

The Intention to Invest in Retail Bonds in Indonesia

“…The results of this research that contrasted with previous studies showed that coupons, tenors, and ease of buying retail bonds did not necessarily influence the intention of employees to invest. In Listyarti and Suryani (2014), the perceived behavioural control influenced the intention of selecting the stock, which was in line with this study. The use of funds derived from their funds also made for a consideration in investing.…”

Novice Investor Behavior in Indonesia Stock Exchange: a Comparative Study Before and During Covid-19 Pandemic

“…Prior to the Covid-19 pandemic, subjective norm had no effect on investing intention of investors. This is in line with the results of the research by Listyarti & Suryani (2014) which concluded that subjective norms have no effect on investment intentions in the Indonesian capital market. Ejigu & Filatie (2020) from the results of their research also conclude the same thing, namely subjective norms was not statistically significant in affecting intention though it has a negative relationship with the intention to invest.…”

“…The results of research by Rahadjeng& Fiandari (2020) show that attitude, subjective norms and behavioral control have an influence on the intention to invest in share investment. This is in line with the research results of Pahlevi & Oktaviani (2018), Listyarti & Suryani (2014) and Seni & Ratnadi (2017) which concluded that the attitude, subjective norm, perception of behavior control, have positive effect on investors' intention in investing.…”

“…They also pay more attention to recommendations, information and advice from fellow investors rather than based on personal intuition. The more influential outsiders or recommendations from others, the more influence the investment decisions made by investors (Listyarti & Suryani, 2014). This is what makes subjective norms have a positive influence on investment intention, as stated by Rahadjeng&Fiandari(2020), Pahlevi& Oktaviani(2018), Listyarti & Suryani (2014) and Seni & Ratnadi (2017).…”

Extending the Theory of Planned Behaviour: Impact of Past Behavioural Biases on the Investment Decision of Indian Investors

“…The presence of these phenomena in the financial market is the probable reason why the failure of risk management system is based on the neoclassical assumptions of normal distributions (Chittedi, 2014). Within the literature, researches in the financial market are moving towards the behavioural aspects of investment rather than adhering to the fundamental or traditional approaches (Listyarti & Suryani, 2014;Olokoyo, Oyewo, & Babajide, 2014;Sandberg, Hutter, Richetin, & Conner, 2016). With an alternative perspective looking at human behaviour, the paradigm of behavioural finance can thus shift to looking at other theories that are open to the multidisciplinary understanding of human behaviour (Tuyon & Ahmad, 2016).…”