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Factors affecting investment decision-making in Pakistan stock exchange

Author

Listed:
  • Adeel Mumtaz

    (Preston University, Islamabad, Pakistan)

  • Tahir Saeed

    (Preston University, Islamabad, Pakistan)

  • M. Ramzan

    (Preston University, Islamabad, Pakistan)

Abstract

This study analyzes the impact of various factors like heuristic, risk aversion, financial tools and techniques, firm’s corporate governance, and day-to-day experience on the investor’s decision-making. The sample consisted of 701 individual investors trading in the Pakistan Stock Exchange. The Ordinary Least Square (OLS) is used for the estimation of research models. The findings revealed that heuristics, risk aversion, financial tools and techniques have a significant positive effect on the investment decisions of investors. The day-to-day experience and corporate governance (CG) play an important role in investment decision-making of the financial sector in Pakistan. This study will contribute to creating awareness in a diversity of investors for investing in the equity market and increases the investors’ confidence.

Suggested Citation

  • Adeel Mumtaz & Tahir Saeed & M. Ramzan, 2018. "Factors affecting investment decision-making in Pakistan stock exchange," International Journal of Financial Engineering (IJFE), World Scientific Publishing Co. Pte. Ltd., vol. 5(04), pages 1-14, December.
    • Handle: RePEc:wsi:ijfexx:v:05:y:2018:i:04:n:s2424786318500330
    DOI: 10.1142/S2424786318500330
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    1. Tuğba Yalnız & Gökçe Candan, 2019. "Evaluation of Factors Affecting Investment Decision Analysis Under Uncertainty Conditions with Fuzzy DEMATEL Approach," EKOIST Journal of Econometrics and Statistics, Istanbul University, Faculty of Economics, vol. 30(0), pages 49-64, June.
    2. Zain UI Abideen & Zeeshan Ahmed & Huan Qiu & Yiwei Zhao, 2023. "Do Behavioral Biases Affect Investors’ Investment Decision Making? Evidence from the Pakistani Equity Market," Risks, MDPI, vol. 11(6), pages 1-32, June.
    3. Salam A. Alshamy, 2019. "Factors Affecting Investment Decision Making: Moderating Role of Investors Characteristics," The Journal of Social Sciences Research, Academic Research Publishing Group, vol. 5(4), pages 965-974, 04-2019.
    4. Candy & Guseriwan, 2020. "Investment Decision Making of Institutional Investor: What is Behind It?," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 4(6), pages 435-438, June.
    5. Naveeda K. Katper & Muhammad Azam & Nazima Abdul Karim & Syeda Zinnaira Zia, 2019. "Behavioral biases and investors’ decision-making: The moderating role of socio-demographic variables," International Journal of Financial Engineering (IJFE), World Scientific Publishing Co. Pte. Ltd., vol. 6(03), pages 1-15, September.

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