Impact of Social Factors on Individual Investors’ Trading Behaviour

Shanmugham, R.; Ramya, K.

doi:10.1016/s2212-5671(12)00084-6

Cited by 52 publications

(23 citation statements)

References 15 publications

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“…The same type and level of financial risk may be assessed differently by two different individuals, and this phenomenon is conflicting with the traditional finance theories such as the CAPM. The current result which supports H8 also corroborates past findings that were based on western context, including research in finance (Lee, 2009;Ramayah et al, 2009;Shanmugham and Ramya, 2012) and non-finance fields (Ki and Hon, 2012;Ulleberg and Rundmo, 2003).…”

Section: ⅳ Results and Discussionsupporting

confidence: 92%

“…It is believed that the advent of social media platforms such as blogs, Twitter, and Facebook, coupled with a vast improvement in the portable device technologies such as handheld computer tablets and smartphones can further improve human interactions. Social interactions with colleagues, friends, family members, and the Internet are considered as an essential avenue to propagate information and ideas effectively (Shanmugham and Ramya, 2012). Not only do individual investors discuss with their family members, colleagues, and friends about financial investments, investment views and decisions are also influenced by these people (Nofsinger, 2005).…”

Section: ⅱ Literature Reviewmentioning

confidence: 99%

“…Similarly, in examining behavioural intention pertaining to online share trading, Lee (2009) and Ramayah et al (2009) have found that attitude has a direct positive impact on behavioural intention to use online trading. Another research that investigated the determinants of investment intention among individuals also deduced that attitude has a strong positive relationship with intention towards trading (Shanmugham and Ramya, 2012). Sahi et al (2013) advocated individuals utilise numerous filters in interpreting the information made available to them, and the filtering process is linked to the designs of the human mind in relation to making financial investment decisions.…”

Section: ⅱ Literature Reviewmentioning

confidence: 99%

See 2 more Smart Citations

An Investigation of Financial Investment Intention using Covariance-Based Structural Equation Modelling

Lim¹,

Mail²,

Karim³

et al. 2020

Glob Bus Financ Rev

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Decision-making process about financial investment is complicated. Relying on modern financial theory to explain behaviours of individual investors is inadequate because it focuses on the objective risk as the determinant for making investment decisions under the assumption that individuals are rational. The current study, which was built from the financial, sociological and psychological perspectives, investigated the predictors of risk perception and determined the association of risk perception and attitude toward financial investment intention. This study served the purpose of unravelling the complexity of the financial investment decision-making process among individuals. Design/methodology/approach: The research framework was based on Perception Formation Model (PFM) with further support from the Theory of Planned Behaviour, decision making models under risk, and knowledge-attitudebehaviour model. Purposive-sampling method was adopted. The dataset, which consisted a total of 492 responses from income earners below the age of prime savings years were entered for analysis. Twelve hypotheses were tested using the Analysis of Moment Structures (AMOS) statistical software. Findings: Measurement-model assessment revealed the data fitted well to the research model Results from the structural-model assessment revealed subjective knowledge, peer influence, internet influence, and risk propensity had a significant relationship with favourable risk perception. Consistent with the PFM proposition, it was found favourable risk perception significantly related to higher intention toward financial investment. Research limitations/implications: The resultant outcomes strengthen the understanding of how financial investment decision is performed by individuals, which is crucial in the personal-finance industry, especially in promoting a long-term and meaningful client-advisor relationship. Interestingly, objective knowledge, which measured the actual level of financial knowledge was found to be insignificantly associated with risk perception and intention toward financial investment. As a sizeable financial literature posited financial knowledge has impact on decision-making process, future study could perhaps examine whether objective knowledge could contextually alter the relationship between predictors and the endogenous variable. Originality/value: The study has successfully identified several predictors for risk perception about financial investment and provided an empirical link for knowledge-perception-attitude-intention, thus, enriching the behavioural finance literature. The research model was robust as it was formulated based on the three major pillars of behavioral finance, namely: financial, sociological, and psychological perspectives.

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Section: ⅳ Results and Discussionsupporting

confidence: 92%

Section: ⅱ Literature Reviewmentioning

confidence: 99%

Section: ⅱ Literature Reviewmentioning

confidence: 99%

See 1 more Smart Citation

An Investigation of Financial Investment Intention using Covariance-Based Structural Equation Modelling

Lim¹,

Mail²,

Karim³

et al. 2020

Glob Bus Financ Rev

View full text Add to dashboard Cite

show abstract

“…From this study, the findings show that most of the investors are aware of the social media and has a positive significant impact on investors' decision making. This finding is consistent with the results from the studies of Mudholkar and Uttarwar (2015) and Shanmugham and Ramya (2012). The findings also describe that social media are more informative, innovative and interested to use than traditional media among the investors.…”

Section: Resultssupporting

confidence: 91%

Usage of Social Media among the Equity Investors with Special Reference to Selected Stock Broking Firms in Coimbatore

Kavitha¹

2017

gmt

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Social media is a rising and emerging trend in the world today. Social media networking allows users to easily and quickly share pictures, ideas, links and messages with other users; theoretically making easy social interaction. It is being used by students, parents, professionals, business people, religious organizations and so on. Nowadays, it is used by investors for gathering and sharing the investment information, better communication and doing research purpose also. One of the survey results showed that getting timely information and industry updates was the most common reason to use social media. This paper has attempted to study about the usage pattern, preference and perception of equity investors towards the social media in Coimbatore city. Data were collected using a structured questionnaire from the equity investors of selected stock broking firms in Coimbatore city. The collected data were analyzed using percentage analysis, multiple response analysis and weighted average rank analysis. Results reveal that most of the equity investors are aware of the social media and being used effectively in their investment decision making.

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“…Investors seek advice on the investment option from advisors, bankers, analysts and planners before the actual investment. The involvement of various aspects in the investment decision-making, investment decision-making can be categorized as complex decision-making behavior (Hirschey & Nofsinger, 2008;Shanmugham & Ramya, 2012). Researchers in economic psychology and behavioral finance have recently become interested in the issue of how investors' subjective perceptions about companies may influence their decisions to invest in the companies' stocks, for example, Ang, Chua, and Jiang (2010), , Aspara (2013), MacGregor, Slovic, Dreman, and Berry (2000), Statman, Fisher, and Anginer (2008).…”

Section: Introductionmentioning

confidence: 99%

Examining the impact of product involvement, subjective norm and perceived behavioral control on investment intentions of individual investors in Pakistan

Ibrahim

Arshad

2017

Investment Management and Financial Innovations

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This study aims to examine the impact of product involvement, subjective norm and perceived behavioral control on investment intentions of individual investors in Pakistan. The data were collected from 548 individual investors in Pakistan using systematic random sampling. The data analysis was done using descriptive and inferential statistics. The results of the analysis showed that product involvement and subjective norm have a significant impact on investment intention of individual investors in Pakistan. On the other hand, the perceived behavioral control appears as insignificant in influencing the investment intentions of individual investors. The results of the analysis can be helpful for the investment advisors in efforts to increase the level of involvement. They need to develop and promote customized investment portfolios for their customers that suit their risk profile, investment objectives and financial constraints.

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Impact of Social Factors on Individual Investors’ Trading Behaviour

Cited by 52 publications

References 15 publications

An Investigation of Financial Investment Intention using Covariance-Based Structural Equation Modelling

An Investigation of Financial Investment Intention using Covariance-Based Structural Equation Modelling

Usage of Social Media among the Equity Investors with Special Reference to Selected Stock Broking Firms in Coimbatore

Examining the impact of product involvement, subjective norm and perceived behavioral control on investment intentions of individual investors in Pakistan

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