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The Role of Investor Sentiment and Government Behaviour in Volatility of Tehran Stock Exchange Market: A Behavioural Economics Approach

Author

Listed:
  • Dadgar, Yadollah

    (Professor of Economics, University of Shahid Beheshti)

  • Dargahi, Hasan

    (Associate Professor of Economics, University of Shahid Beheshti)

  • Gholizadeh, Saeed

    (Master of Economics, University of Shahid Beheshti)

Abstract

Investigating investor behaviour and how the government does play a role, have a significant impact on the financial markets. Hence the e main goal of this article is to analyse the role of the emotions of investors based on the government interventions. For this purpose, by using behavioural economics and behavioural finance methods on one hand and econometric models on the other, this work is analysing the crisis of the Iranian stock exchange market in 2020. The daily data is collected from 30 large companies of the Tehran stock exchange market. The result indicates the significant impact of investors' emotions and the government performance on net money entry of real persons in the stock market. Thus, necessity of the rational behaviour of the government with respect to the stock market, along with the promotion of shareholder culture to control investors’ emotion, could be considered as one of the policy implications of this article

Suggested Citation

  • Dadgar, Yadollah & Dargahi, Hasan & Gholizadeh, Saeed, 2023. "The Role of Investor Sentiment and Government Behaviour in Volatility of Tehran Stock Exchange Market: A Behavioural Economics Approach," Quarterly Journal of Applied Theories of Economics, Faculty of Economics, Management and Business, University of Tabriz, vol. 10(1), pages 191-214, June.
    • Handle: RePEc:ris:qjatoe:0302
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    More about this item

    Keywords

    Behavioural Economics; Behavioural Finance; Stock Market; Investor Emotions; Role of Government;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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