Tạp chí Khoa học Đại học Mở Thành phố Hồ Chí Minh - Kinh tế và Quản trị kinh doanh (Mar 2024)

The impact of overconfidence on trading frequency and the decision to use financial leverage: A study in the Vietnamese stock market

  • Phùng Thái Minh Trang,
  • Đỗ Thị Thùy Linh

DOI
https://doi.org/10.46223/HCMCOUJS.econ.vi.19.8.2898.2024
Journal volume & issue
Vol. 19, no. 8
pp. 23 – 36

Abstract

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Financial knowledge plays a vital role in economic decisions. However, research on overconfidence or underconfidence in financial knowledge is limited. Therefore, the study examines these behavioral biases. Using data on 210 individual investors with three methods of multivariate regression, structural equation model, and logit regression, the results show that over- and under-confidence in financial knowledge directly affect the trading frequency and indirectly affect the use of debt. The results have implications for policymakers in raising investor awareness, helping to avoid behavioral biases in financial decisions, and contributing to sustainable stock market development.

Keywords