Emotional investing in India: the importance of clear communication
Jagriti Arora & Poornima Gupta
What the paper says
Purpose The paper contributes to the famous “stock-market participation puzzle” by highlighting the interplay of the readability of disclosure documents and emotions in driving investment intention in a mutual fund. Design/methodology/approach The study uses partial least squares structural equation modeling to link the theory of planned behavior along with the emotion of affect to the intention to invest in a mutual fund. We study the relationship using an experimental approach while incorporating the readability of the mutual fund’s disclosure document. Findings Affect, attitude and subjective norms significantly influence investment intentions. Affect emerges as the strongest predictor, irrespective of the readability of financial disclosures. However, attitude plays a larger role under low-readability conditions, while subjective norms significantly influence intentions when disclosures are highly readable. Originality/value This is the first-of-its-kind experimental study that links the readability of disclosure documents and emotions to investment behavior. Further, the findings highlight investment decisions’ emotional and cognitive dimensions, offering policy and practical insights.
Evidence weight
Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40
| F · citation impact | 0.50 × 0.4 = 0.20 |
| M · momentum | 0.50 × 0.15 = 0.07 |
| V · venue signal | 0.50 × 0.05 = 0.03 |
| R · text relevance † | 0.50 × 0.4 = 0.20 |
† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.