EMPIRICAL ANALYSIS OF THE FINANCIAL BEHAVIOR OF INVESTORS WITH BRAND APPROACH (CASE STUDY: TEHRAN STOCK EXCHANGE)
DOI:
https://doi.org/10.1515/saeb-2017-0007Keywords:
behavioral finance, perceived return, perceived risk, brand awareness, Tehran stock exchangeAbstract
Behavioral science in the field of finance and investment is among new topics raised in recent years. The relationship between financial sciences and other fields of social sciences such as financial psychology has caused researchers to do many researches regarding the behavior of investors in the financial markets and their reactions to different situations. Based on the theories of financial behavior, shareholders' decision to buy and sell stocks is under the influence of internal and external psychological factors. Through designing and experimental testing of the model of investors' financial behavior in the Tehran Stock Exchange with an emphasis on brand, this study was an attempt to investigate the influence of these factors. To this end, financial, psychological and social factors were considered as the most important external factors influencing the behavior of investors and, considering the mediating role of brand awareness, their impact on perceived risk and perceived return as well as investment intention was tested. The research population consisted of all individual investors in the Tehran Stock Exchange. In order to determine the sample size, considering unlimited population, Cochran formula was used and hence the sample size was determined to be 145. For data collection, standard questionnaire was used. Confirmatory factor analysis was used to test the reliability of the questionnaire and the research hypotheses were tested using path analysis. The results showed that psychological factors have a positive impact on perceived risk and returns. Financial factors had a positive impact on perceived risk but no impact on perceived return. The impact of social factors on perceived risk and perceived return was not confirmed. Moreover, the results showed that brand awareness has a moderating role in the relationship between social factors and perceived risk and return. However, its moderating role was not confirmed in the relationship between the psychological and financial factors and perceived risk and return. Perceived risk had a positive effect on attitude toward the brand. However, the impact of perceived return on attitude toward the brand was not significant. Finally, the attitude toward the brand had a positive effect on shareholders' investment intention.
JEL Codes - G02References
Aren, S., Aydemir, S. D., and Sehitoglu, Y., 2016. Behavioral Biases on Institutional Investors: A Literature Review. Kybernetes, 45(10), 1668-1684. doi: http://dx.doi.org/10.1108/K-08-2015-0203
Aspara, J., and Henrikki, T., 2011. Corporate Marketing in the Stock Market: The Impact of Company Identification on Individuals' Investment Behavior. European Journal of Marketing, 45(9/10), 1446-1469. doi: http://dx.doi.org/10.1108/03090561111151844
Azwadi, A., 2011. The Mediating Role of Attitudes in Trading Companies' Shares. Journal of Global Business and Economics, 3(1), 57-73.
Badri, R., Abbaszadeh, M., Nasiri, F., Hosseini-e-asl, M., and Alizade-e-aghdam, F., 2011. Evaluation of Confirmatory Factor Analysis and Internal Consistency of the Scale Association with the Nature in Students (A Scale in the Field of Environmental Sociology and Psychology). Journal of Applied Sociology, 22(4), 19-34.
Bakar, M., and Ng Chui Yi, A., 2016. The Impact of Psychological Factors on Investors' Decision Making in Malaysian Stock Market: A Case of Klang Valley and Pahang. Procedia Economics and Finance, 35(12), 319-328. doi: http://dx.doi.org/10.1016/S2212-5671(16)00040-X
Bartlett, J., Kotrlik, J., and Higgins, C., 2001. Organizational Research: Determining Appropriate Sample Size in Survey Research. Information Technology, Learning and Performance Journal, 19(1), 43-50.
Bennet, E., and Selvam, M., 2013. The Influence of Stock Specific Factors on the Sentiment of Equity Investors: Evidence from Indian Stock Market. Proceedings of the 20th ASBBS Annual Conference, 20(1).
Bennet, E., Selvam, M., Indhumathi, G., Ramkumar, R. R., and Karpagam, V., 2011. Factors Influencing Retail Investors' Attitude towards Investing in Equity Stocks: A Study in Tamil Nadu. Journal of Modern Accounting and Auditing, 7(3), 316-321.
Brown, S., and Taylor, K., 2014. Household Finances and the 'Big Five' Personality Traits. Journal of Economic Psychology, 45, 197-212. doi: http://dx.doi.org/10.1016/j.joep.2014.10.006
Chou, C.-P., and Bentler, P. M., 1995. Estimates and Tests in Structural Equation Modeling. In R. H. Hoyle (Ed.), Structural Equation Modeling: Concepts, Issues, and Applications (pp. 37-55). Thousand Oaks, CA: Sage Publications, Inc.
Chuah, S. H., and Devlin, J., 2011. Behavioral Economics and Financial Services Marketing: A Review. International Journal of Bank Marketing, 29(6), 456-469. doi: http://dx.doi.org/10.1108/02652321111165257
Cochran, W. G., 1963. Sampling Techniques (2nd ed. ed.). New York: John Wiley and Sons, Inc.
Crespi, B. J., and Bookstein, F. L., 1989. A Path-analytic Model for the Measurement of Selection on Morphology. 43(1), 18-28.
Dowling, N. A., Corney, T., and Hoiles, L., 2009. Financial Management Practices and Money Attitudes as Determinants of Financial Problems and Dissatisfaction in Young Male Australian Workers. 20(2), 5-13.
Durand, R., Newby, R., Tant, K., and Trepongkaruna, S., 2013. Overconfidence, Overreaction and Personality. 5(2), 104-133. doi: http://dx.doi.org/10.1108/RBF-07-2012-0011
Duxbury, D., 2015. Behavioral Finance: Insights from Experiments I: Theory and Financial Markets. 7(1), 78-96. doi: http://dx.doi.org/10.1108/RBF-03-2015-0011
Fathi, S., and Dehghani-e-Anari, F., 2013. The Effect of Sociological Factors on the Adaptive, Informative and Normative Behavior of Investors in the Stock Exchange. 17(3), 44-68.
Foster, F. D., and Kalev, P. S., 2016. Editorial to the Special Issue of the International Journal of Managerial Finance - Behavioral Finance. 12(1), IJMF-10-2015-0186. doi: http://dx.doi.org/10.1108/IJMF-10-2015-0186
Gait, A., and Worthington, A. C., 2015. Attitudes of Libyan Retail Consumers toward Islamic Methods of Finance. 8(4), 439-454. doi: http://dx.doi.org/0.1108/IMEFM-04-2013-0056
Gherzi, S., Egan, D., Haisley, E., and Ayton, P., 2012. Meerkats, Not Ostriches: Portfolio Monitoring, Individual's Differences and Investors' Trading Behavior: Mimeo, City University London.
Guzavicius, A., Vilke, R., and Barkauskas, V., 2014. Behavioral Finance: Corporate Social Responsibility Approach. Procedia: Social and Behavioral Sciences, 156, 518-523. doi: http://dx.doi.org/10.1016/j.sbspro.2014.11.232
Hoyle, R. H., 1995. Structural Equation Modeling: Concepts, Issues, and Applications. Thousand Oaks, CA: Sage Publications, Inc.
Huang, J. Y., Shieh, J. C. P., and Kao, Y. C., 2016. Starting Points for a New Researcher in Behavioral Finance. International Journal of Managerial Finance, 12(1), 92-103. doi: http://dx.doi.org/10.1108/IJMF-05-2015-0111
Israel, G. D., 1992. Sampling the Evidence of Extension Program Impact. Program Evaluation and Organizational Development, IFAS: University of Florida.
Jahangiri-e-Rad, M., Marfo, M., and Salimi, M., 2014. Evaluating Collective Behavior of Investors in the Tehran Stock Exchange. Quarterly of Empirical Studies in Financial Accounting, 11(42), 141-158.
Jureviciene, D., Bikas, E., Keliuotyte-Staniuleniene, G., Novickyte, L., and Dubinskas, P., 2014. Assessment of Corporate Behavioral Finance. Procedia: Social and Behavioral Sciences, 140, 432-439. doi: http://dx.doi.org/10.1016/j.sbspro.2014.04.449
Katarachia, A., and Konstantinidis, A., 2014. Financial Education and Decision Making Processes. Procedia Economics and Finance, 9, 142-152. doi: http://dx.doi.org/10.1016/S2212-5671(14)00015-X
Khajavi, S., and Ghasemi, M., 2006. Efficient Market Hypothesis and Behavioral Finance. Journal of Financial Research, 7(20), 49-69.
Khateri, T., 2012. Investigation of the Relationship between Job Characteristics and Organizational Citizenship Behavior. (Master's Thesis), Islamic Azad University Sanandaj.
Khoshtinat, M., and Nadi Ghomi, W., 2009. The Relationship between Investors' Overconfidence and Stock Return. 10(25), 53-85.
Kourtidis, D., Sevic, Z., and Chatzoglou, P., 2011. Investors' Trading Activity: A Behavioral Perspective and Empirical Results. Journal of Socio-Economics, 40(5), 548-557. doi: http://dx.doi.org/10.1016/j.socec.2011.04.008
Kumar, S., and Goyal, N., 2015. Behavioral Biases in Investment Decision Making: A Systematic Literature Review. Qualitative Research in Financial Markets, 7(1), 88-108. doi: http://dx.doi.org/10.1108/QRFM-07-2014-0022
Lodhi, S., 2014. Factors Influencing Individual Investor Behavior: An Empirical Study of City Karachi. Journal of Business and Management, 16(2), 68-76.
MacCallum, R. C., and Austin, J. T., 2000. Applications of Structural Equation Modeling in Psychological Research. Annual Review of Psychology, 51(2), 201-226. doi: http://dx.doi.org/10.1146/annurev.psych.51.1.201
Martenson, R., 2008. How Financial Advisors Affect Behavioral Loyalty. International Journal of Bank Marketing, 26(2), 119-147. doi: http://dx.doi.org/10.1108/02652320810852781
Muradoglu, G., and Harvey, N., 2012. Behavioral Finance: The Role of Psychological Factors in Financial Decisions. Review of Behavioural Finance, 4(2), 68-80. doi: http://dx.doi.org/10.1108/19405971211284862
Ngoc, L., 2014. Behavior Pattern of Individual Investors in Stock Market. International Journal of Business and Management, 9(1), 1-16.
Nourbakhsh, K., and Arghavani, A., 2016. Evaluating the Effect of Brand on Viewpoint. Strategic Management Research, 15(40), 121-140.
Olsen, R. A., 2010. Toward a Theory of Behavioral Finance: Implications from the Natural Sciences. Qualitative Research in Financial Markets, 2(2), 100-128. doi: http://dx.doi.org/10.1108/17554171080000383
Oprean, C., 2014. Effects of Behavioral Factors on Human Financial Decisions. Procedia Economics and Finance, 16, 458-463. doi: http://dx.doi.org/10.1016/S2212-5671(14)00825-9
Oprean, C., and Tanasescu, C., 2014. Effects of Behavioral Finance on Emerging Capital Markets. Procedia Economics and Finance, 15, 1710-1716. doi: http://dx.doi.org/10.1016/S2212-5671(14)00645-5
Pinar, M., Girard, T., Trapp, P., and Eser, Z., 2016. Services Branding Triangle: Examining the Triadic Service Brand Promises for Creating a Strong Brand in Banking Industry. International Journal of Bank Marketing, 34(4), 529-549. doi: http://dx.doi.org/10.1108/IJBM-04-2015-0043
Ra'aei, R., and Falah-pour, R., 2005. Behavioral Finance: A Different Approach in the Area of Financing. Financial Research, 6(2), 77-106.
Shafi, M., 2014. Determinants Influencing Individual Investor Behavior in Stock Market: A Cross Country Research Survey. Arabian Journal of Business and Management Review, 2(1), 60-71.
Shafiee, S. S., Moradi, M., and Rahmani, H., 2016. An Empirical Study of Factors Affecting Investors' Decisions in the Iranian Stock Market: A combined DEMATEL-ANP approach. Aestimatio, The IEB International. The Journal of Finance, 9, 112-149.
Shahrabadi, A., and Yousefi, R., 2008. An Introduction to Behavioral Finance. Stock Exchange, 3(69), 24-33.
Subrahmanyam, A., 2007. Behavioral Finance: A Review and Synthesis. European Financial Management, 14(1), 12-29.
Tehrani, R., and Khoshnoud, M., 2005. Identifying and Ranking the Groups Influencing Decisions of Individual Investors in the Tehran Stock Exchange. Management Culture, 3(3), 203-209.
Toma, F., 2015. Behavioral Biases of Investment Decisions of Romanian Investors on the Bucharest Stock Exchange. Procedia Economics and Finance, 32, 200-207. doi: http://dx.doi.org/10.1016/S2212-5671(15)01383-0
Tuyon, J., and Ahmad, Z., 2016. Behavioral Finance Perspectives on Malaysian Stock Market Efficiency. Borsa Istanbul Review, 16(1), 43-61.
Wanyana, B., 2011. Investor awareness, perceived risk attitudes, and stock market investor behavior: a case of UGANDA securities exchange: Makerere University Business School.
Zanjeerdar, M., Mousavi, R., and Saberi, M., 2014. Determining Human Behavior Factors in Optimal Portfolio Selection Compared with Standard Finance. Journal of Investment Knowledge, 3(9), 207-222.
Zhang, B., and Wang, Y., 2015. Limited Attention of Individual Investors and Stock Performance: Evidence from the China Market. Economic Modelling, 50(9), 94-104. doi: http://dx.doi.org/10.1016/j.econmod.2015.06.009
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2017 SCIENTIFIC ANNALS OF ECONOMICS AND BUSINESS

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
All accepted papers are published on an Open Access basis.
The Open Access License is based on the Creative Commons license.
The non-commercial use of the article will be governed by the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License as currently displayed on https://creativecommons.org/licenses/by-nc-nd/4.0
Under the Creative Commons Attribution-NonCommercial-NoDerivatives license, the author(s) and users are free to share (copy, distribute and transmit the contribution) under the following conditions:
1. they must attribute the contribution in the manner specified by the author or licensor,
2. they may not use this contribution for commercial purposes,
3. they may not alter, transform, or build upon this work.