Abstract
Behavioral Finance is an evolving field that studies how psychological factors affect decision making
under uncertainty. Herding behavior is one of the psychological factors that instigate investor to
mimic the actions of other investors in the market rather than using his personal assessments. This
study seeks to find the influence of certain attitudinal factors namely, decision conformity, hasty
decision, mood, decision accuracy and overconfidence, on the individual investor tendency to
embrace herd behavior. Primary data for the study are collected using structured questionnaires
from a sample of 194 investors who are trading at Islamabad and Lahore branches of Pakistan
Stock Exchange. Multiple linear regression analysis is used to test the hypotheses of this study.
Findings of this study provide evidence that attitudinal factors have significant influence on
investor’s tendency to take on herd behavior. It is concluded from the results of multiple linear
regression that decision conformity, mood and decision accuracy have significant impact on
individual investor tendency to adopt herd behavior. However, investor hasty decision and
overconfidence are insignificant predictors of herd behavior.
Faid Gul, Karamat Khan. (2019) An Empirical Study of Investor Attitudinal Factors Influencing Herd Behavior: Evidence from Pakistan Stock Exchange, Abasyn Journal of Social Sciences, Volume-12, Issue-1.
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