The role of investor behavior in emerging stock markets: Evidence from Vietnam

Thi Nha Truc Phan, Philippe Bertrand (), Hong Hai Phan and Xuan Vinh Vo
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Thi Nha Truc Phan: UEH - University of Economics Ho Chi Minh City
Philippe Bertrand: CERGAM - Centre d'Études et de Recherche en Gestion d'Aix-Marseille - AMU - Aix Marseille Université - UTLN - Université de Toulon, AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique, KEDGE Business School [Marseille]
Hong Hai Phan: IUH - Industrial University of Ho Chi Minh city, UEH - University of Economics Ho Chi Minh City
Xuan Vinh Vo: CFVG - Centre Franco-Vietnamien de Formation à la Gestion, UEH - University of Economics Ho Chi Minh City

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Abstract: Exloring the role of different types of investors on stock market is crticial since different types of investors react and behave differently when making investment decision. The role of investor behavior is a very important issue in an immature stock market like Vietnam stock market because the market is characterized by a large number of individual investors and low reporting standard. Institutional and foreign investors however play an influential role due to their large exposure and strong investment expertise. Clearly, examining the role of investor behavior and its impact on the stock market in Vietnam is an important topic in finance. A significant body of empirical research has shown that investor behavior is an essential factor to explain stock price that the classical financial theory cannot explain. This research examines the role of investor behavior in stock market by examining the relationship between investor behavior and stock return using the Vietnamese stock exchange data. We create a sentiment index using the principal components analysis (PCA). Consistent with the sentiment and stock return literature, the research shows a negative contemporaneous relationship between investor sentiment and market return.

Keywords: Investor behavior; Vietnam stock market; Individual investors; Foreign investors; Investors sentiment; Stock return (search for similar items in EconPapers)
Date: 2023-02
Note: View the original document on HAL open archive server: https://amu.hal.science/hal-04092936v1
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Citations: View citations in EconPapers (3)

Published in Quarterly Review of Economics and Finance, 2023, 87, pp.367-376. ⟨10.1016/j.qref.2021.07.001⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04092936

DOI: 10.1016/j.qref.2021.07.001

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