Investment Decision Making of Institutional Investor: What is Behind It?

Candy and Guseriwan
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Candy: Faculty of Economy, Universitas Internasional Batam, Indonesia
Guseriwan: Faculty of Economy, Universitas Internasional Batam, Indonesia

International Journal of Research and Innovation in Social Science, 2020, vol. 4, issue 6, 435-438

Abstract: The purpose of this study is to analyze the relationship between financial behavior and investment decisions of institutional investors in Batam City. The importance of financial behavior and uncertainty of capital market information enables investors to use the obtained information for more significant result investment, but there are different situations to achieve the result. The study collected feedback from 80 investors from Insurance, Banking, Finance, and Securities companies using targeted sampling techniques. Data analysis used partial least squares structural equation model (PLS-SEM) by testing the inner and outer model. The result showed that financial tools and firm-level corporate governance have a significant positive effect on investment decisions. It allows financial instruments to make investment decisions through fundamental analysis, and firms with corporate governance levels can provide value to shareholders. Capital markets always reflect information and may have a positive or negative impact. The result also found that heuristic and risk a version do not affect investment decisions. It concluded that respondents tended to take rational actions when evaluating information and were not risk-averse investors.

Date: 2020
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