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Determinants of Investors Financial Behavior in Tehran Stock Exchange


  • Mahmood Yahyazadehfar

    () (Assistant professor of finance Faculty of Economics and administrative sciences Mazandaran University, Babolsar, Iran)

  • Mohammad Reza Zali

    (Assistant professor of management Faculty of Economics and administrative sciences Mazandaran University, Babolsar, Iran)

  • Hooman Shababi

    (Lecturer of Management Rahedanesh institute of higher education, Babol, Iran)


Decision making and investors’ behavior are affected by various factors in Tehran stock exchange. Based on theoretical perspective; investors collect the key information of decision making by study of the macro and micro levels of investment environments. In order to analyze the research data, path analysis and LISREL software are used. The results indicate that political factors with 62%, psychological factors with 53%, economic factors with 47% and internal factors with 31% are the most important factors that affect the stocks trading in Tehran Stock Exchange. Not only political and psychological factors have direct effect, but also they affect the investor's financial decision making indirectly (through intended interest rate) 16% and 11%, respectively. Total effect of political and psychological factors on investors financial decision making are 79% and 64%, respectively.

Suggested Citation

  • Mahmood Yahyazadehfar & Mohammad Reza Zali & Hooman Shababi, 2009. "Determinants of Investors Financial Behavior in Tehran Stock Exchange," Iranian Economic Review, Economics faculty of Tehran university, vol. 14(1), pages 61-77, spring.
  • Handle: RePEc:eut:journl:v:14:y:2009:i:1:p:61

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    References listed on IDEAS

    1. David Hirshleifer, 2001. "Investor Psychology and Asset Pricing," Journal of Finance, American Finance Association, vol. 56(4), pages 1533-1597, August.
    2. Ritter, Jay R. & Warr, Richard S., 2002. "The Decline of Inflation and the Bull Market of 1982–1999," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 37(01), pages 29-61, March.
    3. Froot, Kenneth A. & Dabora, Emil M., 1999. "How are stock prices affected by the location of trade?," Journal of Financial Economics, Elsevier, vol. 53(2), pages 189-216, August.
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