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The role of investor behavior in emerging stock markets: Evidence from Vietnam

Author

Listed:
  • Thi Nha Truc Phan

    (UEH - University of Economics Ho Chi Minh City)

  • Philippe Bertrand

    (CERGAM - Centre d'Études et de Recherche en Gestion d'Aix-Marseille - AMU - Aix Marseille Université - UTLN - Université de Toulon, AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique, KEDGE Business School [Marseille])

  • Hong Hai Phan

    (IUH - Industrial University of Ho Chi Minh city, UEH - University of Economics Ho Chi Minh City)

  • Xuan Vinh Vo

    (CFVG - Centre Franco-Vietnamien de Formation à la Gestion, UEH - University of Economics Ho Chi Minh City)

Abstract

Exloring the role of different types of investors on stock market is crticial since different types of investors react and behave differently when making investment decision. The role of investor behavior is a very important issue in an immature stock market like Vietnam stock market because the market is characterized by a large number of individual investors and low reporting standard. Institutional and foreign investors however play an influential role due to their large exposure and strong investment expertise. Clearly, examining the role of investor behavior and its impact on the stock market in Vietnam is an important topic in finance. A significant body of empirical research has shown that investor behavior is an essential factor to explain stock price that the classical financial theory cannot explain. This research examines the role of investor behavior in stock market by examining the relationship between investor behavior and stock return using the Vietnamese stock exchange data. We create a sentiment index using the principal components analysis (PCA). Consistent with the sentiment and stock return literature, the research shows a negative contemporaneous relationship between investor sentiment and market return.

Suggested Citation

  • Thi Nha Truc Phan & Philippe Bertrand & Hong Hai Phan & Xuan Vinh Vo, 2023. "The role of investor behavior in emerging stock markets: Evidence from Vietnam," Post-Print hal-04092936, HAL.
    • Handle: RePEc:hal:journl:hal-04092936
    DOI: 10.1016/j.qref.2021.07.001
    Note: View the original document on HAL open archive server: https://amu.hal.science/hal-04092936v1
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    2. Deddy P. Koesrindartoto & Aurelius Aaron & Shuqi Wang, 2024. "Do Foreign Investors Underperform or Outperform Domestic Investors in Trading Activities? Evidence from Indonesia," IJFS, MDPI, vol. 12(4), pages 1-11, October.
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    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G40 - Financial Economics - - Behavioral Finance - - - General

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