Abstract
Many authors have recognised that psychological factors influence the decision making of investors in the
stock market. However, the SMEs sector always overlooked, but it plays an essential role in economic
upsurge. The prime purpose of the current study is to investigate the influence of psychological factors such
as confidence, optimism, loss aversion and herding behaviour could affect investment decisions in KP’s
SMEs. The pilot study carried out initially. The study surveyed 249 samples through simple random
technique through self-administrative questionnaires as previously no questionnaire available. The
reliability of the questionnaire is 0.71 Cronbach’s Alpha Static and validity of the questionnaire is checked
through Exploratory Factor Analysis (EFA). The study uses the descriptive statics, frequency and binary
logistic regression used. The mean value of psychological factors is 3.81 shows a high impact on
investment decisions, with 66% of investors has shown positive concern over psychological factors and
considering it motivational factor for investment decisions. The result binary logistic model revealed that
all sub-factors of psychological are positively significant with investment decision except the loss aversion.
The probability of investing in the presence of confidence (79.59%), optimism (89.90%), loss aversion
(64.29%), herd behaviour (88.37%) and overall psychological factors (80.54%) in KP’s SMEs. Hence it
can be concluded that investors are rational and their investment decisions in SME’s at times influence by
psychological factors.
MIAN MUHAMMAD WASEEM IQBAL, Prof. Dr. S. GHIASUL HAQ, LAL MUHAMMAD. (2020) Psychological Factors Affecting the Investment Decisions in the Promotion of Small and Medium Enterprises (SMEs) In Khyber Pakhtunkhwa, International Review of Management and Business Research, Volume 9, Issue 2.
-
Views
486 -
Downloads
386
Article Details
Volume
Issue
Type
Language
