Factors Influencing Individual Investors’ Behavior: An Empirical Study of the Vietnamese Stock Market

Abstract

In this paper, the theory of planned behavior is used as a conception lens to explore the impact of factors influencing individuals’ investment behavioral intention in the Vietnamese stock market together with a decomposed approach to the theory of planned behavior to investigate the level of impact each factor influences individuals’ behavioral intention. A structured questionnaire is used to collect data from individual investors in the Vietnamese stock market. The structural equation modeling is employed with support from AMOS 20.0 software in data analysis. Results found in this research have identified the impact level of the given factors on individuals’ behavioral intention, which support the hypotheses that an individual investor’s investment intention is significantly affected by his attitude towards investment, subjective norm and perceived behavioral control. The study has also provided strong evidences for the existence of psychological factors which supports the hypothesis that four psychological factors (overconfidence, excessive optimism, psychology of risk and herd behavior) do have significant impact on the individuals’ attitude towards investment. Concurrently the study has found the supporting evidence for the argument that gender has a strong interference in the relations between the psychological factors and the attitude towards investment, between the attitude towards investment and behavioral intention, between subjective norms and behavioral intention as well as between perceived behavioral control and behavioral intention of the Vietnamese individual investors. Keywords: Individual investors, psychological factors, behavioral intention, attitude, subjective norm, perceived behavioral control