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Reactions of dissatisfied investors: exit, voice or loyalty

Author

Listed:
  • Muge Tasci

    (Middle East Technical University
    Capital Markets Board of Turkey)

  • Ozlem Ozdemir

    (Middle East Technical University
    Middle East Technical University)

Abstract

This study examines the reactions of individual investors that have invested in the stocks of companies that have been eventually delisted from the stock market due to bankruptcy and/or bad governance. Data to determine reaction styles of investors are collected through a well-established questionnaire to a sample of 67 investors of Borsa Istanbul. Multinomial logistic regression analysis concludes that investors’ perceived knowledge about the stock market is the most important factor affecting how investors react. More specifically, the higher the knowledge perceived, the higher the tendency of the investors to keep investing (loyalty) as the reaction. Further, more experienced investors are found to complain/ask for their rights (voice) more.

Suggested Citation

  • Muge Tasci & Ozlem Ozdemir, 2017. "Reactions of dissatisfied investors: exit, voice or loyalty," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 22(3), pages 109-118, September.
    • Handle: RePEc:pal:jofsma:v:22:y:2017:i:3:d:10.1057_s41264-017-0027-4
    DOI: 10.1057/s41264-017-0027-4
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    References listed on IDEAS

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    1. Sridhar Balasubramanian & Prabhudev Konana & Nirup M. Menon, 2003. "Customer Satisfaction in Virtual Environments: A Study of Online Investing," Management Science, INFORMS, vol. 49(7), pages 871-889, July.
    2. Jonathan Macey & Maureen O'Hara & David Pompilio, 2008. "Down and Out in the Stock Market: The Law and Economics of the Delisting Process," Journal of Law and Economics, University of Chicago Press, vol. 51(4), pages 683-713, November.
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    Cited by:

    1. Mark Ojeme & Ogechi Adeola, 2023. "The relationship between business and bank: the role of perceived injustice in complaint behaviour," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 28(2), pages 396-409, June.
    2. Yener Cos‚kun & A. Sevtap Selcuk-Kestel & Bilgi Yilmaz, 2017. "Diversification benefit and return performance of REITs using CAPM and Fama-French: Evidence from Turkey," Borsa Istanbul Review, Research and Business Development Department, Borsa Istanbul, vol. 17(4), pages 199-215, December.

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    More about this item

    Keywords

    Individual investor; Dissatisfaction; Exit; Voice; Loyalty;
    All these keywords.

    JEL classification:

    • G02 - Financial Economics - - General - - - Behavioral Finance: Underlying Principles
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions

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