Year: 2024
Type: article
Study design: Observational Study
Abstract: Purpose: This study aims to explore the psychological factors influencing herding behavior among investors in the Pakistan Stock Exchange (PSX). Design/Methods/Approach: Data has been collected through questionnaire from 400 respondents, the study identifies information, national culture, market sentiments, experience, and overconfidence as independent variables affecting herding behavior as dependent variable. Findings: The study found that information, national culture, market sentiments, and experience positively influence herding behavior, while overconfidence has a significant and negative relationship with herding behavior. The model explains 55% of the variation in the behavior and has a Q² value of 0.270 which strengthen the findings. Originality/Value: This study contributes to knowledge in the field of behavioral finance, particularly in developing countries, and suggests future research can expand on psychological factors and investor types. Practical/Policy implication: The findings can assist investors in making more rational and optimal investment decisions and avoiding herding by conducting independent research, taking calculated risks, and expanding their knowledge of diverse cultures.
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W4408613183