Contextual factors influencing investment decision making: a multi group analysis

Muskan Sachdeva and Ritu Lehal

PSU Research Review, 2023, vol. 8, issue 3, 592-608

Abstract: Purpose - Stock markets are considered as the largest and most important units for the development and growth of the economy. The present study attempts to provide a comprehensive view of factors influencing investment decision making process of stock market investors. A multi group analysis of gender is also carried out on the proposed model. Design/methodology/approach - The data of 402 valid responses are collected through structured questionnaires from individual investors of North India. SPSS 23 is used to do the descriptive analysis and AMOS 22 is used to establish the validity of the constructs and for hypotheses testing. For performing multi group analysis, several invariance tests have also been conducted to check the robustness of the model. Findings - The results reveal that all the factors such as firm image, accounting information, neutral information, advocate recommendation and personal financial needs significantly influence investment decision making concluding image of the firm being the most influential factor and advocate recommendation being the least influential factor for investment decisions. No significant differences between males and females were found. Research limitations/implications - The current study suffers from the limitation of restricted geographical area of North India. Moreover, there is also a scope to incorporate more demographic factors for predicting investment decisions. Originality/value - This study incorporates a range of factors which covers all the aspects of investment decision making. This study also highlights the notion of signaling theory, thus contributing to the limited literature in Indian context.

Keywords: Behavioral finance; Investment decision making; Signaling theory; Multi group analysis; Indian stock market (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eme:prrpps:prr-08-2022-0125

DOI: 10.1108/PRR-08-2022-0125

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