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Investment Decision Making of Institutional Investor: What is Behind It?

Author

Listed:
  • Candy

    (Faculty of Economy, Universitas Internasional Batam, Indonesia)

  • Guseriwan

    (Faculty of Economy, Universitas Internasional Batam, Indonesia)

Abstract

The purpose of this study is to analyze the relationship between financial behavior and investment decisions of institutional investors in Batam City. The importance of financial behavior and uncertainty of capital market information enables investors to use the obtained information for more significant result investment, but there are different situations to achieve the result. The study collected feedback from 80 investors from Insurance, Banking, Finance, and Securities companies using targeted sampling techniques. Data analysis used partial least squares structural equation model (PLS-SEM) by testing the inner and outer model. The result showed that financial tools and firm-level corporate governance have a significant positive effect on investment decisions. It allows financial instruments to make investment decisions through fundamental analysis, and firms with corporate governance levels can provide value to shareholders. Capital markets always reflect information and may have a positive or negative impact. The result also found that heuristic and risk a version do not affect investment decisions. It concluded that respondents tended to take rational actions when evaluating information and were not risk-averse investors.

Suggested Citation

  • Candy & Guseriwan, 2020. "Investment Decision Making of Institutional Investor: What is Behind It?," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 4(6), pages 435-438, June.
    • Handle: RePEc:bcp:journl:v:4:y:2020:i:6:p:435-438
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    References listed on IDEAS

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    1. Rima Al-Sager & Durga Prasad Samontaray, 2018. "Gender Wise Saudi Investors' Awareness of Corporate Governance Mechanism and Its Importance in Their Investment Decision Making – An Empirical Study," International Business Research, Canadian Center of Science and Education, vol. 11(3), pages 118-132, March.
    2. Sarika Keswani & Vippa Dhingra & Bharti Wadhwa, 2019. "Impact of Behavioral Factors in Making Investment Decisions and Performance: Study on Investors of National Stock Exchange," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 11(8), pages 1-80, August.
    3. Adeel Mumtaz & Tahir Saeed & M. Ramzan, 2018. "Factors affecting investment decision-making in Pakistan stock exchange," International Journal of Financial Engineering (IJFE), World Scientific Publishing Co. Pte. Ltd., vol. 5(04), pages 1-14, December.
    4. Qureshi, Salman Ali & Rehman, Kashif ur & Hunjra, Ahmed Imran, 2012. "Factors Affecting Investment Decision Making of Equity Fund Managers," MPRA Paper 60783, University Library of Munich, Germany.
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