Behavioural Bias of Legal Clients of Stock Exchange Investors in the Banking Industry

Abstract

12 public and private banks are currently present in the stock exchange market in the “bank and credit institution” group. This study examines the behavioral bias of legal clients of stock exchange investors according to the literature on the behavioral finance. The grounded theory approach has been used to examine the patterns of behavioral bias of legal clients. The research data are the narratives of the participants (legal clients of stock market investors) for 2021. Nineteen people were selected using the purpose-based sampling method, and their narratives were collected through semi-structured interviews and coded by MaxQda software and analyzed in three stages. The findings of the study have shown that institutional investor behavioral bias is formed on social, emotional and psychological bias platforms, whose drivers are social factors, market, knowledge and experience, and psychological factors. To reduce the impact of behavioral bias, strategies for portfolio diversification strategies, investment strategies, investment analysis, and the use of information, are used which in turn result in improved capital market efficiency and investor success. Furthermore, the strategies are influenced, on the one hand, by cultural, political and economic factors, and on the other hand by the financial characteristics of the company, the policy of the company, and the institutional characteristics.

Keywords

• behavioural finance
• behavioural bias of investors
• behavioural bias resources
• legal investors