scholarly journals Research on the Relationship between CEO's Overconfidence and Corporate Investment Financing Behavior

2018 ◽  
Vol 10 (1) ◽  
pp. 8
Author(s):  
Yan-liang Zhang ◽  
Zi-wei Yang
Keyword(s):  
Corporate Finance ◽  
Behavioral Finance ◽  
Stock Exchange ◽  
Private Company ◽  
Corporate Leaders ◽  
Investment Financing ◽  
Owned Company ◽  
Financing Behavior ◽  
Finance Theory ◽  
The Relationship

At present, the classic corporate finance theory is challenged by various behavioral visions of corporate leaders in the actual decision-making of corporate finance. From the perspective of behavioral finance, this paper selects the data of A-share listed companies in China's Shanghai Stock Exchange and Shenzhen Stock Exchange in 2003-2016 to study the relationship between CEO's overconfidence and business operations. The study found that: Overconfidence CEOs will tend to increase the level of leverage, increase the number of loans, especially to increase the number of short-term loans; When the economic growth is faster, the listed company's CEO is more inclined to overconfidence; However, unlike the results of foreign studies, overconfident companies did not replace CEOs more frequently than non-overconfident companies, and did not increase the probability of bankruptcy. Finally, the CEO of a state-owned company does not appear to be more overconfident than the CEO of a private company.

scholarly journals Behavioral finance: the analysis of investor behavior based on belief and feeling and the investor rationality towards LQ 45 stocks

2018 ◽  
Vol 15 (1) ◽  
pp. 292-298
Author(s):  
Etty Indriani ◽  
Cahyani Tunggal Sari
Keyword(s):  
Regression Analysis ◽  
High Risk ◽  
Behavioral Finance ◽  
Significant Relationship ◽  
Stock Exchange ◽  
Low Risk ◽  
Investor Behavior ◽  
Average Return ◽  
High Return ◽  
The Relationship

This research analyzes behavioral finance, especially the behavior of investors in Yogyakarta, Indonesia Region. The performance of investor behavior is examined based on the LQ 45 stocks return on Indonesia Stock Exchange and questionnaires that are spread out to five securities agents in Yogyakarta.The performance of LQ 45 stocks return is compared to the questionnaire analysis in the “Belief” part at the first and second stages. The first result shows that LQ 45 stocks are profitable. It can be seen from the average return of the stocks that it has positive value and is statistically identical with the LQ 45 index return. This result is in line with the investors’ opinion that LQ 45 stocks are profitable. The second result shows that most of LQ 45 stocks are profitable and give high return. But, this result is also contrary to the opinion of investors towards traditional finance paradigm that investors still believe “high risk – high return, low risk – low return”. Although most of LQ 45 stocks are considered as low risk stocks, many investors prefer to choose LQ 45 stocks. It means that the traditional finance paradigm has weakness. It is proven that investors sometimes act irrationally.The third and fourth stages of the study are aimed to analyze the relationship between feeling and belief towards frequency of transaction each day based on the questionnaire using regression analysis. The result shows that there is significant relationship between feeling and frequency of transaction each day.

scholarly journals The Influence of Research Reports on Stock Returns: The Mediating Effect of Machine-Learning-Based Investor Sentiment

2021 ◽  
Vol 2021 ◽  
pp. 1-14
Author(s):  
Xiaohong Shen ◽  
Gaoshan Wang ◽  
Yue Wang
Keyword(s):  
Machine Learning ◽  
Stock Returns ◽  
Behavioral Finance ◽  
Investor Sentiment ◽  
Mediating Effect ◽  
Machine Learning Method ◽  
Mediating Role ◽  
Finance Theory ◽  
The Relationship ◽  
The Empirical Analysis

This paper investigates whether and how the research reports issued by securities companies affect stock returns from the perspective of investor sentiment in China. By collecting research reports and investor comments from a popular Chinese investor community, i.e., East Money, we derive two indices that represent the information contained in research reports: one is the attention of research reports and the other is the average stock rating given by research reports; then we develop an investor sentiment indicator using the machine learning method. Based on behavioral finance theory, we hypothesize that research reports have a significant effect on stock returns and investor sentiment plays a mediating role in it. The empirical analysis results confirm the above hypotheses. Specifically, the average stock rating given by research reports can better predict future stock returns, and investor sentiment plays a partial mediating role in the relationship between stock rating and stock returns.

scholarly journals Economic Factors And Individual Investor Behavior: The Case Of The Greek Stock Exchange

2011 ◽  
Vol 20 (4) ◽  
Author(s):  
Anna A. Merikas ◽  
Andreas G. Merikas ◽  
George S. Vozikis ◽  
Dev Prasad
Keyword(s):  
Behavioral Finance ◽  
Stock Exchange ◽  
Investor Behavior ◽  
Economic Factors ◽  
Individual Investor ◽  
Font Size ◽  
Empirical Survey ◽  
Athens Stock Exchange ◽  
The Individual ◽  
Finance Theory

<p class="MsoNormal" style="text-align: justify; margin: 0in 0.5in 0pt;"><span style="font-size: 10pt;"><span style="font-family: Times New Roman;">This study undertook an empirical survey of the factors, which mostly influence individual investor behavior in the Greek stock exchange.<strong> </strong>The results revealed by our sample of 150 respondents confirm that there seems to be a certain degree of correlation between the factors that behavioral finance theory and previous empirical evidence identify as the influencing factors for the average equity investor, and the individual behavior of active investors in the Athens Stock Exchange (ASE) influenced by the overall trends prevailing at the time of the survey in the ASE.</span></span></p>

Effect of Overconfident Investor Behavior to Stock Market

2010 ◽  
Vol 14 (6) ◽  
pp. 661-668 ◽  
Author(s):  
Ryota Inaishi ◽  
◽  
Kaoru Toya ◽  
Fei Zhai ◽  
Eisuke Kita
Keyword(s):  
Stock Market ◽  
Behavioral Finance ◽  
Efficient Market Hypothesis ◽  
Investor Behavior ◽  
Efficient Market ◽  
Multiagent Simulation ◽  
Finance Theory ◽  
The Relationship ◽  
Psychological Bias

Behavioral finance theory has been presented to explain the phenomena not explainable by conventional finance theory based on efficient market hypothesis from the investor psychology. We focused on overconfidence – an important psychological bias –, and analyzed the effect of overconfident investor behavior in stock market using multiagent simulation. We found that, based on the increase in overconfident market investors, market dealing increases and rising trends occur more often. An analysis of the relationship between overconfidence and rising trends shows that rising trends make investors even more overconfident.

scholarly journals BEHAVIORAL FINANCE: EMPIRICAL EVIDENCE USING MAGIC FORMULA IN THE BRAZILIAN STOCK MARKET

2020 ◽  
Vol 21 (6) ◽  
Author(s):  
FREDERICO DIMARZIO ◽  
JOSE MATIAS FILHO ◽  
RICARDO A. FERNANDES
Keyword(s):  
Stock Market ◽  
Behavioral Finance ◽  
Design Methodology ◽  
Stock Exchange ◽  
Behavioral Effect ◽  
Magic Formula ◽  
Economic Agents ◽  
Efficient Markets Hypothesis ◽  
Finance Theory ◽  
Made In

ABSTRACT Purpose: Explain the causes of inefficiencies in asset pricing on the Brazilian stock exchange through the behavioral finance hypothesis. Originality/value: Research made in the stock market over the last decades suggests that there is evidence of obtaining returns above the market average, through the purchase of undervalued assets, that is, when it has a low relation between the price and the fundamentals of the company. However, there is a notable discrepancy regarding the interpretation of causes among academics. The efficient markets hypothesis was presented, which is based on the premise of the strict rationality of economic agents. On the other hand, the behavioral finance theory was also discussed, which presents different assumptions. Design/methodology/approach: Using the historical quotes of the shares traded on B3, extracted from economática(r)'s database, the present work used the Magic Formula methodology to investigate the behavioral effect through the inefficiencies found in the pricing of these assets. Findings: The results suggest that the Brazilian stock market, in conformity with works of the same nature performed in markets in other countries, has inefficiencies in the pricing of assets, so that it is possible to obtain advantages from economic agents. The interpretation for the causes of such inefficiencies is based on the premises of behavioral finance, and points to the existence of a limitation in the rationalization of these agents.

scholarly journals Ramadan effect on sectoral herding

2020 ◽  
Vol 11 (6) ◽  
pp. 1867
Author(s):  
Mohammad Kamel Elshqirat
Keyword(s):  
Behavioral Finance ◽  
Stock Prices ◽  
Stock Exchange ◽  
Ordinary Least Squares ◽  
Industrial Sectors ◽  
Daily Data ◽  
Amman Stock Exchange ◽  
Finance Theory ◽  
And Behavior ◽  
Level Analysis

One variable that affects stocks prices in the financial markets is herding behavior. As the level of herding is not constant over time, its level may be different during some events. Herding may increase during religious events like Ramadan in the Muslim world causing volatility to increase and leading to unexplained stock prices. The purpose of this study was to test the effect of Ramadan on herding presence at market and sector levels. The study was based on the behavioral finance theory which considers mood and behavior of investors as variables that may affect the prices of stocks. The enquiry that the researcher tried to answer was whether the presence of herding in the market and sectors is affected by Ramadan. To achieve the study purpose, a quantitative study was conducted using daily data from Amman stock exchange for the period from 2000 to 2018. Collected data were analyzed using ordinary least squares (OLS) method. The Results of market-level analysis showed that market investors do not herd during and out of Ramadan. At sector-level, however, herding is absent during Ramadan and exists out of it in services and industrial sectors while it's absent in both times in the financial sector. 

scholarly journals The Multifactorial Pastor-Stambaugh model: explaining the impact of liquidity on the rate of return based on the example of the Warsaw Stock Exchange

Equilibrium ◽  
2017 ◽  
Vol 12 (2) ◽  
pp. 211
Author(s):  
Agata Gniadkowska-Szymańska
Keyword(s):  
Stock Returns ◽  
Stock Return ◽  
Stock Exchange ◽  
Value Added ◽  
Rate Of Return ◽  
Warsaw Stock Exchange ◽  
Incremental Rate ◽  
Finance Theory ◽  
The Impact ◽  
The Relationship

Research background: The liquidity of assets in the financial market is under-stood gener-ally as costs, and the easiest way in which different types of assets can be converted into cash, or to put it simply, sold at the currently available price on the market. For a considerable period of time this category had not been duly considered in the framework of modern finance theory. As a result, a number of basic models constructed within the framework of this theory in its classical form did not include problems with liquidity. This applies to a number of aspects related to liquidity, with one of the most important being the relationship between the liquidity of trading in shares and the results obtained from these rates of return.Purpose of the article: The aim of the article is to determine whether the rate of return on shares increases with the increase in share liquidity and the incremental rate of return on this account decreases with increasing liquidity. The applied re-search methodology is similar to that described by Pastor and Stambaugh (2003). The model used in the empirical study is the expanded model of Fama and Francha (1993) for the liquidity factor.Methods: In this paper I present various factors which will affect the liquidity. The paper will also provide the results of research concerning the relations between spread and stock return on the Warsaw Stock Exchange (WSE). The evidence drawn from WSE stock returns over the period 2004–2012 indicates that Amihuda measure and other variables have a significant effect on stock return using the multifactorial Pastor-Stambaugh.Findings & Value added: In the case of the Polish market, it can be stated that in the analysis based on the Pastor-Stambaugh model not all the variables included in this model are statistically significant. However, directional parameters associated with liquidity risk were statistically significant in all analyzed periods, which allows us to confirm the hypothesis that liquidity has a significant influence on the rate of return on shares listed on the Stock Exchange in Warsaw.

Kredit Bermasalah sebagai Pemoderasi Pengaruh Tingkat Penyaluran Kredit terhadap Profitabilitas

2020 ◽  
Vol 5 (1) ◽  
pp. 52
Author(s):  
Sukirno Sukirno
Keyword(s):  
Research Method ◽  
Quantitative Research ◽  
Stock Exchange ◽  
Survey Methods ◽  
Analytical Tool ◽  
Significant Positive Effect ◽  
Purposive Sampling ◽  
The Relationship ◽  
Positive Effect

Abstract This study aims to empirically challenge the moderation of Non-Performing Loans to the effect of Credit Distribution Rates on Profitability. The population of 81 bank companies listed on the Indonesia Stock Exchange in the period 2014-2018 and which met the criteria of the research sample (purposive sampling) were 22 companies. The research method uses survey methods with quantitative research approaches, the analytical tool used is moderation regression. This study concludes that the level of credit distribution has a significant positive effect on profitability and the existence of the problem loan variable is proven to be a moderating variable that weakens the relationship between the level of credit distribution and profitability.    

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