The Impact of Behavioral Biases on Investment Performance: Does Financial Literacy Matter?
This paper aims to investigate the impact of behavioral biases and financial literacy on investment performance in an emerging stock market context. Based on data collected from a sample of 196 Moroccan investors operating in Casablanca stock exchange, we test the research hypotheses using structur...
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| Format: | Article |
| Language: | English |
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EconJournals
2021-05-01
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| Series: | International Journal of Economics and Financial Issues |
| Online Access: | https://econjournals.com/index.php/ijefi/article/view/11318 |
| _version_ | 1797921226706911232 |
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| author | Hind Lebdaoui Youssef Chetioui Elias Guechi |
| author_facet | Hind Lebdaoui Youssef Chetioui Elias Guechi |
| author_sort | Hind Lebdaoui |
| collection | DOAJ |
| description |
This paper aims to investigate the impact of behavioral biases and financial literacy on investment performance in an emerging stock market context. Based on data collected from a sample of 196 Moroccan investors operating in Casablanca stock exchange, we test the research hypotheses using structural equation modeling. Out of the four heuristics examined in our proposed conceptual framework (i.e. overconfidence, representativeness, anchoring and herding), only overconfidence and representativeness had a significant positive impact on financial performance. Our results also suggest a significant positive impact of financial literacy on representativeness, while it was found negatively associated with overconfidence. This research paper is the first of its kind to investigate the existence of heuristics in an African, Arab and emerging market. As well, the current study is among the earliest attempts to examine how behavioral biases relate to investors performance.
Keywords: Heuristics; financial literacy; investment performance; stock market; SEM.
JEL Classification: G02.
DOI: https://doi.org/10.32479/ijefi.11318
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| first_indexed | 2024-04-10T14:13:10Z |
| format | Article |
| id | doaj.art-54c239be504447ff9bf45e6183351755 |
| institution | Directory Open Access Journal |
| issn | 2146-4138 |
| language | English |
| last_indexed | 2024-04-10T14:13:10Z |
| publishDate | 2021-05-01 |
| publisher | EconJournals |
| record_format | Article |
| series | International Journal of Economics and Financial Issues |
| spelling | doaj.art-54c239be504447ff9bf45e61833517552023-02-15T16:09:39ZengEconJournalsInternational Journal of Economics and Financial Issues2146-41382021-05-011135197The Impact of Behavioral Biases on Investment Performance: Does Financial Literacy Matter?Hind Lebdaoui0Youssef Chetioui1Elias Guechi2School of Business Administration Al Akhawayn University in IfraneSchool of Business Administration Al Akhawayn UniversitySchool of Business Administration Al Akhawayn University in Ifrane This paper aims to investigate the impact of behavioral biases and financial literacy on investment performance in an emerging stock market context. Based on data collected from a sample of 196 Moroccan investors operating in Casablanca stock exchange, we test the research hypotheses using structural equation modeling. Out of the four heuristics examined in our proposed conceptual framework (i.e. overconfidence, representativeness, anchoring and herding), only overconfidence and representativeness had a significant positive impact on financial performance. Our results also suggest a significant positive impact of financial literacy on representativeness, while it was found negatively associated with overconfidence. This research paper is the first of its kind to investigate the existence of heuristics in an African, Arab and emerging market. As well, the current study is among the earliest attempts to examine how behavioral biases relate to investors performance. Keywords: Heuristics; financial literacy; investment performance; stock market; SEM. JEL Classification: G02. DOI: https://doi.org/10.32479/ijefi.11318 https://econjournals.com/index.php/ijefi/article/view/11318 |
| spellingShingle | Hind Lebdaoui Youssef Chetioui Elias Guechi The Impact of Behavioral Biases on Investment Performance: Does Financial Literacy Matter? International Journal of Economics and Financial Issues |
| title | The Impact of Behavioral Biases on Investment Performance: Does Financial Literacy Matter? |
| title_full | The Impact of Behavioral Biases on Investment Performance: Does Financial Literacy Matter? |
| title_fullStr | The Impact of Behavioral Biases on Investment Performance: Does Financial Literacy Matter? |
| title_full_unstemmed | The Impact of Behavioral Biases on Investment Performance: Does Financial Literacy Matter? |
| title_short | The Impact of Behavioral Biases on Investment Performance: Does Financial Literacy Matter? |
| title_sort | impact of behavioral biases on investment performance does financial literacy matter |
| url | https://econjournals.com/index.php/ijefi/article/view/11318 |
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