Investment environment, stock market perception and stock investments after stock market crash

PurposeThis study examines how the importance of external investment environment factors affects stock market perception, and how stock market perception affects stock investments after stock market crash witnessed by individual investors in one of the emerging stock markets.Design/methodology/appro...

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Bibliographic Details
Published in:International journal of emerging markets 2023-11, Vol.18 (10), p.3506-3527
Main Authors: Khan, Mohammad Tariqul Islam, Tan, Siow-Hooi, Chong, Lee-Lee, Goh, Gerald Guan Gan
Format: Article
Language:English
Subjects:
Capital markets
Decision making
Electronic trading systems
Emerging markets
Institutional investments
Investments
Investors
Perceptions
Politics
Public policy
Securities markets
Stock exchanges
Stock market crashes
Stock prices
Volatility
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Summary:PurposeThis study examines how the importance of external investment environment factors affects stock market perception, and how stock market perception affects stock investments after stock market crash witnessed by individual investors in one of the emerging stock markets.Design/methodology/approachA cross-sectional survey was administrated among 223 individual investors who experienced stock market crash in 2010–2011 in Bangladesh, and the proposed model was tested by the partial least squares-structural equation modeling PLS-SEM model.FindingsFindings show that the importance of Bangladesh's stock market performance, government policy, economic issues and neighboring country's stock market performance have effects on investors' stock market perception. This perception, in turn, decreases monthly stock trading and short-term investment horizon. The findings further show the mediating effect of stock market perception.Practical implicationsInvestors need to carefully consider the external investment environment when they form their stock market perception, as this perception drives stock investments. Analogously, regulators should ensure releasing timely and updated statistics on external investment factors.Originality/valueAddressing those investors who encountered stock market crash, a set of external investment environment issues, stock market perception and stock investments are new in the literature.
ISSN:1746-8809
1746-8817
DOI:10.1108/IJOEM-03-2021-0456