settingsOrder Article Reprints Open AccessEditor’s ChoiceArticle Do Behavioral Biases Affect Investors’ Investment Decision Making? Evidence from the Pakistani Equity Market
Document Type
Article
Publication Date
6-6-2023
Abstract
Using a unique sample constructed by 600 investors’ responses to a structured questionnaire, we investigate the impact of behavioral biases on the investors’ investment decision making in the Pakistani equity market, as well as the roles that market anomalies and financial literacy play in the decision-making process. We first document the empirical evidence to support that the behavioral biases and market anomalies are closely associated and that these two factors significantly influence the investors’ investment decision making. The additional analyses confirm the mediating roles of certain market anomalies in the association between the investors’ behavioral biases and their investment decision making. Furthermore, empirical evidence reveals that financial literacy moderates the association between behavioral biases and market anomalies, and eventually influences the investors’ investment decision making. Overall, although the results are inconclusive for the relationships between certain variables, our results highlight the importance of financial literacy in terms of optimal investment decision making of individuals and the stability of the overall stock market.
DOI
https://doi.org/10.3390/risks11060109
Recommended Citation
Abideen, Zain UI; Ahmed, Zeeshan; Qiu, Huan; and Zhao, Yiwei, "settingsOrder Article Reprints Open AccessEditor’s ChoiceArticle Do Behavioral Biases Affect Investors’ Investment Decision Making? Evidence from the Pakistani Equity Market" (2023). Business & Economics Faculty Publications. 201.
https://digitalcommons.longwood.edu/business_facpubs/201
Original Citation
Do Behavioral Biases affect Investors Investment Decision Making? Evidence from the Pakisani Equity Market. Joint with Zain Abideen, Zeeshan Ahmed, and Haun Qiu, Risks 2023, 11(6)
