Proceedings of the 2nd International Conference on Bigdata Blockchain and Economy Management, ICBBEM 2023, May 19–21, 2023, Hangzhou, China

Research Article

An Empirical Study of the Impact of Investor Sentiment on Stock Returns from a Behavioural Finance Perspective

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  • @INPROCEEDINGS{10.4108/eai.19-5-2023.2334284,
        author={Siyuan  Chen},
        title={An Empirical Study of the Impact of Investor Sentiment on Stock Returns from a Behavioural Finance Perspective},
        proceedings={Proceedings of the 2nd International Conference on Bigdata Blockchain and Economy Management, ICBBEM 2023, May 19--21, 2023, Hangzhou, China},
        publisher={EAI},
        proceedings_a={ICBBEM},
        year={2023},
        month={7},
        keywords={investor sentiment investor confidence stock returns behavioral finance},
        doi={10.4108/eai.19-5-2023.2334284}
    }
    
  • Siyuan Chen
    Year: 2023
    An Empirical Study of the Impact of Investor Sentiment on Stock Returns from a Behavioural Finance Perspective
    ICBBEM
    EAI
    DOI: 10.4108/eai.19-5-2023.2334284
Siyuan Chen1,*
  • 1: Shanghai Lixin University of Accounting and Finance
*Contact email: 2454946577@qq.com

Abstract

Due to the large number of individual investors and the large volume of transactions in the Chinese stock market, and the theory of limited rationality from the perspective of behavioral finance, investors inevitably carry personal emotions in their investment activities, so studying investor sentiment is beneficial to help Chinese investors better understand the Chinese stock market and make more appropriate investment decisions. The research topic is the effect of investor sentiment on stock returns, combines the theoretical foundation of behavioural finance, selects the constituent stocks in the SSE 50 index as a sample, and conducts correlation matrix analysis, regression and hy-pothesis testing by constructing a fixed effects model, and finally concludes that (1) The Investor sentiment has a significant positive impact on stock returns. (2) The In-vestor confidence has a significant negative impact on stock returns. It is therefore hoped that investors will avoid overconfidence when they have a positive bullish sen-timent towards the stock market and ultimately make investment decisions that are suitable and more correct for them.