Investors’ Behavior in an Emerging, Tax-Free Market
- 2 August 2016
- journal article
- research article
- Published by Taylor & Francis Ltd in Emerging Markets Finance and Trade
- Vol. 53 (7), 1573-1588
- https://doi.org/10.1080/1540496x.2016.1178110
Abstract
We provide empirical evidence on the stock market participants’ behavior in an emerging market, with a tax-free environment. Our results show that United Arab Emirates’ (UAE) investors exhibit overconfidence and home bias, and tend to sell prior winners and buy prior losers. We find that investors rely on familiarity and on their information channels to make decisions. The results indicate that investors are risk averse, especially after the global financial crisis, which has had contagion effect on UAE markets. Investors attribute this effect to the inability to manage systemic crisis and to problems of information asymmetry, insider trading, and lack of good governance during crisis.Keywords
This publication has 39 references indexed in Scilit:
- The information content of cash dividend announcements in a unique environmentJournal of Banking & Finance, 2011
- Feedback and the success of irrational investorsJournal of Financial Economics, 2006
- Speculating against an overconfident marketJournal of Financial Markets, 2003
- Dynamic Conditional CorrelationJournal of Business & Economic Statistics, 2002
- Excessive Extrapolation and the Allocation of 401(k) Accounts to Company StockThe Journal of Finance, 2001
- Learning to Be OverconfidentThe Review of Financial Studies, 2001
- Trading Is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual InvestorsThe Journal of Finance, 2000
- The use of technical analysis in the foreign exchange marketJournal of International Money and Finance, 1992
- The Disposition to Sell Winners Too Early and Ride Losers Too Long: Theory and EvidenceThe Journal of Finance, 1985
- Imperfect Information, Dividend Policy, and "The Bird in the Hand" FallacyThe Bell Journal of Economics, 1979