Home bias and investor investment decision: A case of developing country

Abstract

The key objective of the study is to investigate the impact of home bias and stock market psychology on individual investment decisions in the Islamabad and Lahore Stock markets. Further, the study investigates how these individuals perceive their investment decision in light of the impact of home bias and stock market psychology. Using the survey-based methodology the current study used descriptive statistics, correlation, and logistic regression techniques to achieve the research objectives. The findings of this study show that the impacts of home bias along with its sub-variables and stock market psychology have a significant positive impact on individual investment decisions in Islamabad and Lahore Stock markets. The results would be significant for Pakistani stakeholders as they seek to link practices and consequences. Pakistani stakeholders will understand better the role of the impact of home bias and stock market psychology on individual investment decisions in Islamabad and Lahore Stock markets and its impacts on stock market performance. This could lead to changes in stock market trading practices to achieve the desired rate of return from their investment in stock markets.