Financing and Herd Behaviour in Financial Crises: Investment Decision

Raya Panjaitan and Ika Pratiwi Simbolon

International Journal of Economics & Business Administration (IJEBA), 2020, vol. VIII, issue 4, 1089-1096

Abstract: Purpose: The purpose of this study is to provide evidence related to the development of financing and herd behaviour in financial crisis arranging investment decision. Design/Methodology/Approach: This research is a type of literature study. The methodology used is through descriptive research with the support of theories and the findings from previous studies. Findings: Capital structure, as has been proven, affects investment decision in financial crisis period, as well as herd behaviour. The firm value can be influenced from the capital decision that gives signals to the market. However, researchers have not yet reached the optimum capital structure. In this paper, the authors find that recent literature on financing and herd behaviour provides some new insights into investment decision during financial crises. Practical Implications: Authors suggest further directions for increasing the investment strategy in stock market. Evaluating the financing and investment behaviour can lead to the expected return in terms of financial crises. Originality/Value: The authors’ approach can become the basis for investment decision in financial crises. The roles of financing and herd behaviour are really important for investment. There is still less research exploring the role of financial crises in funding decisions and herd behaviour in order to compose investment decision for investor in developed market context.

Keywords: Crisis; herd behaviour; financing behaviour; investment decisions. (search for similar items in EconPapers)
JEL-codes: G3 G4 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ers:ijebaa:v:viii:y:2020:i:4:p:1089-1096

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