Investment Decisions with Endogeneity: A Dirichlet Tree Analysis (original) (raw)
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The Impact of Mass Media Communication on Stock Trading Decisions: An Empirical Study
European Journal of Business and Management, 2012
The buy or sell decision of any stock in stock market has been regarded as one of the most challenging problem for traders or investors. This study investigates the impact of mass media communication on stock trading decisions. The study examined the determinants for buy or sell decisions. The empirical investigation showed the impact of mass communication on the buy or sell trade. This research is based on the Indian stock markets, SENSEX and NIFTY. To analyze the impact of mass media communication on stock trading decisions, a primary survey is conducted with the investors or traders as members of social system, and how they change (react) their decisions with response to different ideas, news and messages they receive from different channels of communication at a certain period of time. A regression model is formulated to compare the impact of technical, fundamental and mass media communication on stock trading decisions. The result shows that mass media communication is probably more effective and influencing than the technical and fundamental analysis. This research paper will help investors and traders to take sell and buy decision of their stock in more efficient manner by means of knowing the impact of mass media communication on stock trading. Further this research work will provide a base to conduct future researches in this area on a large scale, which are the limitations of this research work.
11.[57-62]The Impact of Mass Media Communication on Stock Trading Decisions
The buy or sell decision of any stock in stock market has been regarded as one of the most challenging problem for traders or investors. This study investigates the impact of mass media communication on stock trading decisions. The study examined the determinants for buy or sell decisions. The empirical investigation showed the impact of mass communication on the buy or sell trade. This research is based on the Indian stock markets, SENSEX and NIFTY. To analyze the impact of mass media communication on stock trading decisions, a primary survey is conducted with the investors or traders as members of social system, and how they change (react) their decisions with response to different ideas, news and messages they receive from different channels of communication at a certain period of time. A regression model is formulated to compare the impact of technical, fundamental and mass media communication on stock trading decisions. The result shows that mass media communication is probably more effective and influencing than the technical and fundamental analysis. This research paper will help investors and traders to take sell and buy decision of their stock in more efficient manner by means of knowing the impact of mass media communication on stock trading. Further this research work will provide a base to conduct future researches in this area on a large scale, which are the limitations of this research work.
How news affects the trading behaviour of different categories of investors in a financial market
Quantitative Finance, 2013
We investigate the trading behaviour of a large set of single investors trading the highly liquid Nokia stock over the period 2003-2008 with the aim of determining the relative role of endogenous and exogenous factors that may affect their behaviour. As endogenous factors, we consider returns and volatility, whereas the exogenous factors are the total daily number of news and a semantic variable based on a sentiment analysis of news. Linear regression and partial correlation analysis of data show that different categories of investors are differently correlated to these factors. Governmental and non-profit organizations are weakly sensitive to news and returns or volatility, and, typically, they are more correlated with the former than with the latter. Households and companies, on the contrary, are very sensitive to both endogenous and exogenous factors, and volatility and returns are, on average, much more relevant than the number of news and sentiment, respectively. Financial institutions and foreign organizations are intermediate between these two cases, both in terms of the total explanatory power of these factors and of their relative importance. We explicitly consider the role of overnight news and overnight returns on the successive trading activity and trading balance of the different categories of investors. We observe a role of the overnight news, which is weaker than the one observed between synchronous variables. By performing a vector autoregression analysis (VAR), we show that the flux of news of previous day affects the trading activity of companies, households and foreign investors and the dynamics of the volatility. VAR is not detecting any role of the lagged sentiment on the successive value of the difference between the number of buying and selling investors of each category of investors.
How news affect the trading behavior of different categories of investors in a financial market
2012
Abstract: We investigate the trading behavior of a large set of single investors trading the highly liquid Nokia stock over the period 2003-2008 with the aim of determining the relative role of endogenous and exogenous factors that may affect their behavior. As endogenous factors we consider returns and volatility, whereas the exogenous factors we use are the total daily number of news and a semantic variable based on a sentiment analysis of news.
Segments Influencing Individual Investors Behavior And Their Investment Decision
Restaurant Business, 2019
The essential idea of this assessment is investigate the social factors affecting particular theorists' decisions making limit at Indian Stock Markets. In the examination coordinated standard of direct is Classified subject to two estimations the first is Heuristic (Decision making) and the resulting one is prospect.. For the assessment coordinated the data used is basic natured which is assembled through a sorted out survey from 100 individual money related authorities based out in Hubli and Dharwad city, Karnataka State in India on an accommodating way. The respondents were both sex and overwhelming part male were 68% . These theorists were having a spot with the age bundle between35-45 which is 38%. These respondents have completed their graduation were around 56%. These respondents had work inclusion of 5 to 10 years which is 45% and the majority of which were used in government portion which is 56%. Their compensation was between 4 to 6 Lakh and were fit for placing assets ...
2020
This paper studies how information on the internet affects the stock picking decision of retail investors. We use stock discussion on subReddit r/wallstreetbet to proxy for information that retail investors receive from the internet and look at how stock held by Robinhood investors correlates with the amount of discussion around the stock in Reddit. Our result shows that stocks with a high number of discussions on Reddit are excessively held by Robinhood investors, even after controlling for market capitalization of each stock. Our result sheds light on the process through which retail investors decide which stock to include in their portfolio, and reveals another dimension of irrationality in retail investor's behavior.
Does the Information on the Internet Media Respond to the Stock Market?
2020
This researcher explores and reviews studies that discuss the problem of market reaction based on information available on the internet and social media and looks at investor behavior to respond to that information. This study looks at the information contained in online news articles and various social media platforms based on stock trading days and investor trading patterns. Specifically, this study will discuss how investors' behavior responds to the stock market with a defusion of accounting information or other information related to investment in companies or shares on the internet that is classified based on the impact of news on the internet, social media, as well as an overview of the defusion of information related to investment in the emerging stock market countries and developed stock markets. This research found information reflected in the news media on the internet and social media can be used to make investment decisions in the short term and this information is ...
Management Research Review, 2020
Purpose The purpose of this paper is to determine whether individual investor sentiment and its factors influence investment decision-making behavior in the Indian stock market. The study contributes to the novel conceptual framework that integrates the impact of investor sentiment and outlines the role of its factors (herding, media factor, advocate recommendation and social interaction) during the investment decision-making process. Design/methodology/approach In this paper, data were collected using a structured questionnaire survey from Indian individual investors. It uses self-reported sources of information collected via a survey of individual investors and estimated the linkage via path modeling. The collected data were analyzed using partial least square structural equation modeling to examine the relationship between the construct, namely, herding, media, advocate recommendation and social interaction with investor sentiment and investment decision-making. Findings The stud...
BEHAVIOURAL BIASES IN INVESTMENT DECISIONS: COMPONENT FACTORS EXTRACTION
2019
This paper seeks to explore the component factors of the behavioural biases that prevail among individual investors at the Nigerian stock market. This is an important input in developing the structural model that could be used to ascertain the influence of these biases on individuals' investment performance. It adopts a survey strategy in an exploratory manner through exploratory factor analysis (EFA) using the maximum likelihood estimation approach. The paper finds that four major factors, represented by the theories of heuristics, prospect, market and herding, are indicated by the factor structure matrix. The four factors extracted explain 73.94% of the total variance of all the measurement items in the model. The factors were further validated via the Cronbach's Alpha reliability statistic. The paper, therefore, concludes that the factors extracted are reliable and could be used as the exogenous variables in determining the influence of behavioural factors on individual investors' performance at the Nigerian stock market. It further recommends that these factors should be subjected to convergent and discriminant validity tests to ascertain their uniqueness.
The Annals of Applied Statistics, 2009
Much of the trading activity in Equity markets is directed to brokerage houses. In exchange they provide so-called "soft dollars," which basically are amounts spent in "research" for identifying profitable trading opportunities. Soft dollars represent about USD 1 out of every USD 10 paid in commissions. Obviously they are costly, and it is interesting for an institutional investor to determine whether soft dollar inputs are worth being used (and indirectly paid for) or not, from a statistical point of view. To address this question, we develop association measures between what broker-dealers predict and what markets realize. Our data are ordinal predictions by two brokerdealers and realized values on several markets, on the same ordinal scale. We develop a structural equation model with latent variables in an ordinal setting which allows us to test broker-dealer predictive ability of financial market movements. We use a multivariate logit model in a latent factor framework, develop a tractable estimator based on a Laplace approximation, and show its consistency and asymptotic normality. Monte Carlo experiments reveal that both the estimation method and the testing procedure perform well in small samples. The method is then used to analyze our dataset.