Factors Influencing Individual Investors to invest in Pakistan Stock Exchange (PSX)
DOI:
https://doi.org/10.47067/ramss.v8i2.498Keywords:
Individual investor, investment behaviour, Investment decision, Economic development, Pakistan stock exchange (PSX)Abstract
This study explores the various factors that influencing individual investor performance towards Pakistan Stock Exchange (PSX), highlighting on the relationship of accounting information (AI), demographic factor (DF), and credibility factor (CF), reliability factor (RF) and religious & norms factor (RN). The consequence of this research influence to understanding the difficulties of individual investor’s decision making process in an emerging economy, mainly in Pakistan, where the monetary markets are developing quickly, and the part of individual investors is gradually critical to monetary development. The main goal of this research is to inspect the amount to which these elements effect the investment choices of investors in the Pakistan stock exchange (PSX). The precise objects include measuring how demographic factor like person age, level of education, gender, and relationship status would impact individual investor conduct, studying the part of accounting info in determining investor belief and insights of value, assessing the impression of the supposed trustworthiness and consistency of financial organisations on investment choices, and discovering how spiritual norms effect investment actions.
This study conducts a quantitative method, using a survey practice to collect primary data from individual investors (II) in Karachi, through an entire of 220 respondents who filled the survey. The findings disclose numerous critical understandings like substantial changes in investment conducts are obvious across numerous demographic parts, with newer stakeholders representing a greater feeling toward digital exchange platforms.
References
Lins, K. V., Servaes, H., & Tamayo, A. (2017). Social capital, trust, and firm performance: The role of stakeholder engagement in corporate social responsibility. Journal of Business Ethics, 142(3), 559-577. https://doi.org/10.1007/s10551-015-2839-2
Zaidi, S. H., & Mahmood, N. (2020). The influence of online reviews on investment decisions in Pakistan. Journal of Business Strategies, 14(1), 37-48. https://doi.org/10.54155/jbs.v14i1.123
Cohen, A., & Lichtenberg, E. (2020). Media credibility and responding to financial news: Evidence from stock market reactions. Journal of Behavioral Finance, 21(3), 284–300. https://doi.org/10.1080/15427560.2020.1778864
Sullivan, H. J., & Ruegger, D. (2023). The impact of transparency on investor decisions in emerging markets. International Journal of Emerging Markets, 18(4), 1232-1249. https://doi.org/10.1108/IJOEM-03-2022-0419
Wang, Y., & Hsu, J. (2023). The role of investor sentiment in stock price volatility. International Review of Financial Analysis, 83, 101-114. https://doi.org/10.1016/j.irfa.2022.102345
Fletcher, J., & McCarthy, J. (2013). Trust, reliability, and trustworthiness: The role of financial advisors in investment decision making. Journal of Financial Planning, 26(1), 48–56. https://doi.org/10.2469/faj.v69.n3.4
Kumar, S., & Singh, D. (2015). Age and investment preferences: An empirical study of Indian investors. International Journal of Business and Management Invention, 4(2), 1–6. http://www.ijbmi.org/papers/Vol(4)2/Version-3/A4230106.pdf
Malmendier, U., & Shane, D. (2023). How reliance on financial advisors influences individual investment strategies: Evidence from behavioral experiments. Review of Finance, 27(2), 445–471. https://doi.org/10.1093/rof/rfac032
State Bank of Pakistan. (2022). State of the Pakistan banking sector report. https://www.sbp.org.pk/reports/annual/arfy22.pdf
Nishat, M., & Shaheen, F. (2020). The role of accounting information in investment decisions: Empirical evidence from Pakistan. International Journal of Economics and Financial Issues, 10(3), 393-403. https://doi.org/10.32479/ijefi.9664
Abdallah, S., & Mohsin, A. (2019). Gender, age and financial literacy: Implications for investment decisions in Pakistan's stock market. Journal of Women and Minorities in Science and Engineering, 25(3), 1-20. https://doi.org/10.1615/JWomenMinorScienEng.2019027243
Rafiq, M., & Zafar, M. (2021). Trust and credibility: Their impact on investment decisions in Pakistani stock markets. Journal of Business Research, 130, 917-926. https://doi.org/10.1016/j.jbusres.2020.10.058
Sarfraz, M., Iqbal, Z., & Zafar, A. (2021). The relationship between information reliability and market stability in Pakistan: Evidence from behavioral finance. Asia-Pacific Journal of Business Administration, 13(2), 203–218. https://doi.org/10.1108/APJBA-05-2020-0163
Mehmood, J., & Iqbal, M. (2021). The role of Islamic values in investment decisions: Evidence from the Pakistani stock market. Journal of Islamic Marketing, 12(3), 500–515. https://doi.org/10.1108/JIMA-07-2020-0211
Hassan, M. K., Aliyu, S., Saiti, B., & Abdul Halim, Z. (2021). Stock market portfolio formation and investors' behavior: Evidence from emerging markets. Journal of Behavioral and Experimental Finance, 30, 100501. https://doi.org/10.1016/j.jbef.2021.100501
Sekaran, U., & Bougie, R. (2016). Research methods for business: A skill-building approach (7th ed.). Wiley.
Shah, S. Z. A., Ahmad, M., & Mahmood, F. (2019). Historical data analysis of investor behavior in emerging markets: Evidence from Pakistan Stock Exchange. Emerging Markets Finance and Trade, 55(8), 1693-1710. https://doi.org/10.1080/1540496X.2018.1562896
Naser, K., Nuseibeh, R., & Al-Khatib, A. (2013). Investors’ behavior towards Shariah-compliant stocks: Evidence from the MENA region. Journal of Islamic Accounting and Business Research, 4(2), 106–123. https://doi.org/10.1108/JIABR-10-2012-0069.
Baker, H. K., & Nofsinger, J. R. (2020). Behavioral finance: A new perspective on investment decisions. Journal of Behavioral Finance, 21(1), 1-19. https://doi.org/10.1080/15427560.2020.1716259
Gillan, S. L., & Martin, J. S. (2016). Corporate governance and firm performance: An overview. Corporate Governance: An International Review, 24(3), 234-246. https://doi.org/10.1111/corg.12154
Arshad, M. R., & Khattak, A. (2016). Islamic investment decisions: A study of individual investors in Pakistan. International Journal of Economics and Finance, 8(1), 38-46. https://doi.org/10.5539/ijef.v8n1p38