Factors Affecting Individual Investor’s Behavior to Invest in Ethiopian Private Banks Share Companies
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Date
2020-05
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A.A.U
Abstract
A number of studies have been undertaken to identify the factors influencing individual investor‟s decision to invest in stock markets by considering specific behavioral factors like heuristic, prospect, market and herding factors. This study sought to examine factors affecting individual investor‟s behavior to invest in Ethiopian private banks share companies and had four specific objectives. The first objective sought to determine the influence of heuristics on the behavior of individual investor‟s decision. The second objective assessed the effect of prospect factors on the behavior of individual investor‟s decision while the third was in regard to the effect of market factors on the behavior of individual decision. The fourth objective sought to determine the effect of herding behavior on individual investment decisions on Ethiopian banking share companies. To achieve the objectives of the study, a cross sectional research design was adopted where only primary data was used. The research target population was individual investors those having shares in any of private bank share companies in Ethiopian, the research used scientific method of sampling to determine sample size of 277 individual investors. The data was collected using questionnaires and analyzed through descriptive and inferential approaches with the help of STATA software. The research finding show that heuristics and market factors are jointly do not have significant impact on individual investment decision whereas prospect and herding had significant impact on individual investors decision to invest in Ethiopian Private Bank Share companies. The study recommends that Individual investors those invest in Ethiopian Private bank Share companies should be overconfident at an acceptable level to utilize their skills and knowledge in certain circumstances to make their investment decision is good enough. And also recommends that individual investors should choose good investment partners or alliance to consider as references for their investment.
Description
A Thesis Submitted In Partial Fulfillment Of The Requirements For The Degree In Msc Program In Accounting And Finance
Keywords
Heuristics, Individual investor, Market factor, herding, Prospect