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Psychological tendencies in an emerging capital market: a study of individual investors in India

Author

Listed:
  • Ameet Pandit

    (The University of Newcastle, Australia)

  • Ken Yeoh

    (Northumbria University, UK
    TaylorÕs University, Malaysia)

Abstract

Recent findings in the finance and consumer behaviour literature have shown that investorsÕ investment decisions are likely to be affected by their psychological tendencies. The focus of this paper is to understand how investorsÕ psychological tendencies influence purchase postponement of shares. Furthermore, the moderating effects of product involvement on the relationship between psychological tendencies and also purchase postponement are examined. Using a survey research design, data was collected from Indian investors to empirically test the model using moderated regression analysis. Our findings show that investorÕs psychological tendencies do significantly impact purchase postponement. Furthermore, a profile of Indian retail investors is presented in the paper. Our findings documents another distinct phenomenon of investorsÕ persistent departures from rationality as posited by behavioural finance and also provides a better understanding of the nature of individual investor participation in the Indian capital market.

Suggested Citation

  • Ameet Pandit & Ken Yeoh, 2014. "Psychological tendencies in an emerging capital market: a study of individual investors in India," Journal of Developing Areas, Tennessee State University, College of Business, vol. 48(3), pages 129-148, July-Sept.
    • Handle: RePEc:jda:journl:vol.48:year:2014:issue3:pp:129-148
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    File URL: http://muse.jhu.edu/journals/journal_of_developing_areas/v048/48.3.pandit.html
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    Citations

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    Cited by:

    1. A. Seetharaman & Indu Niranjan & Nitin Patwa & Amit Kejriwal, 2017. "A Study of the Factors Affecting the Choice of Investment Portfolio by Individual Investors in Singapore," Accounting and Finance Research, Sciedu Press, vol. 6(3), pages 153-153, August.
    2. K. N. Rathi & D. Geetha, 2024. "Relationship between Rational and Irrational Investment Decisions and Multiple Intelligence of Investors," International Journal of Economics and Financial Issues, Econjournals, vol. 14(4), pages 282-289, July.
    3. Chhavi Mehta & Neena Sondhi, 2016. "Understanding Indian retail investors' stock investment behaviour: an empirical study," International Journal of Management Practice, Inderscience Enterprises Ltd, vol. 9(1), pages 4-23.
    4. Rathi K. N. & Geetha D., 2023. "Influence of Personality Traits and Behavioural Biases on Irrational Investment Decision Making of Public Officials," The Review of Finance and Banking, Academia de Studii Economice din Bucuresti, Romania / Facultatea de Finante, Asigurari, Banci si Burse de Valori / Catedra de Finante, vol. 15(1), pages 49-63, June.

    More about this item

    Keywords

    Individual Investors; Psychological Tendencies; Purchase Postponement; Emerging Markets;
    All these keywords.

    JEL classification:

    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
    • F15 - International Economics - - Trade - - - Economic Integration

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