Perceived Behavioral Factors and Individual Investor Stock Market Investment Decision: Multigroup Analysis and Major Stock Markets Perspectives

The study aims to examine the impact of various behavioral biases such are overconfidence, representativeness, availability, anchoring and herding, and their effects on individual investment decisions in the case-developed country context of China. To achieve this, data was meticulously gathered from 362 participants active in the Shanghai stock market. Employing advanced analytical tools, particularly the Smart PLS 3.3.2 software and structural equation modelling (SEM), this study rigorously scrutinized the intricate relationships between behavioral biases and investment decisions. The findings of this study notably reveal that all examined behavioral biases exert a significant positive impact on investment decisions within the Anxin, Haitong, Shanxi, and China Galaxy stock markets. Remarkably, no substantial disparities in the effects of these biases on stock market trading were observed among these markets. Importantly, these findings bear exceptional significance within the context of a developed country like China. The implications extend to a wide spectrum of stakeholders, including government entities, regulatory bodies, practitioners, the academic community, industry professionals, and researchers. Regulatory authorities can leverage these insights to refine their strategies, practitioners can fine-tune their investment advisory approaches, and academia and researchers can build upon these findings to deepen the understanding of behavioral finance in the realm of stock market investments. Behavioral finance has emerged as a new branch of finance and psychology that focuses primarily on understanding the behavioral factors that play an important role in shaping a person's thinking. Behavioral finance is an extension of behavioral economics from the study of economics regarding Individual decisions behavioral economics studies the behavior of an individual in the context of Individual investment decisions. Initially, this paper collected primary data on variables such are overconfidence, representativeness, availability, anchoring and herding biases and their impacts on investment decisions in various stock markets with the help of a systematic literature review that essentially consists of empirical studies that show that various behavioral biases have a positive impact on individual investment decisions. This study investigated the various stock markets perspectives on the impact of various ORAAH practices such as overconfidence, representativeness, availability, anchoring, and herding biases and their impacts on investment decisions in various stock markets. The findings of the study indicate that ORAAH practices are important for various stakeholders in stock markets if managed successfully which will assist in achieving substantial return upon their investment in the stock market. Investors should consider the various prevalent behavior biases to achieve the long-term strategic goals of their investment. The results further indicate that the impacts of various investor investment behavioral biases and their impacts on decision making are same among various stock markets Anxin Securities Co. Ltd, Shanxi Securities Co. Ltd., Haitong Securities Co. Ltd, and China Galaxy Securities Co. Ltd.