Behavioral Finance and Investors’ Stock Investments Decisions in West Africa: Evidence from the Nigerian Stock Market

Abstract

This study titled “Behavioral Finance and Investors’ Stock Investments Decisions in West Africa: Evidence from the Nigerian Stock Market” which aim to investigate the behavioral finance factors that impact stock investment choice of individual investors at the Nigerian Stock Market, which is one of the important fast developing markets in Africa. To carry out the study, (140) questionnaire from online respondents who are current investors in the Nigerian stock market was retrieved. Cronbach’s Alpha was used to test the reliability of the instrument, and the Multiple Linear Regression analysis techniques were used to test the hypothesis. Results of the study showed that behavioral finance factors (Loss Averse, Overconfidence, and Risk Perception) have a significant impact on stock investment decisions of individual investors in Nigerian Stock Market, while Herding has an insignificant impact. It is recommended that future studies should take into thought the impacts of other behavioral finance factors that are excluded from this research work and to take a wide sample to affirm the momentum finding of this exploration.