Indonesian Stock’s Influencer Phenomenon: Did Financial Literacy on Millennial Age Reduce Herding Behavior?
:
https://doi.org/10.9744/jak.23.2.62-68Keywords:
Stock market influencers, herding behavior, financial literacy, millennial generation, IndonesiaAbstract
In Indonesia's capital market, there was a phenomenon that famous influencers seem to lead to behavioral bias in the stock market. The stock price changed significantly after those stock influencers shared information or recommended certain stocks. This research examined how the stock influencer's credibility affected investors' investment in recommended stock. We collected data from 132 individual investors who participated in the research. We used a questionnaire with a 5-Likert scale. The result showed that an influencer's credibility had a significant influence on investors' herding behavior. However, there was no significant evidence that financial literacy matters in that relationship. Interestingly, we found there was no significant difference in herding behavior between millennial and non-millennial investors.
References
Adamczyk, A. (2018, December 11). Lifehacker. Retrieved from Lifehacker: https://lifehacker. com/how-ceo-behavior-like-elon-musks-influences-stock-price-1831010286
Adil, M., Singh, Y., & Ansari, M. S. (2021). How financial literacy moderate the association between behaviour biases and investment decision? Asian Journal of Accounting Research, 1-17.
AlFarraj, O., Alalwan, A. A., Obeidat, Z. M., Baabdullah, A., Aldmour, R., & Al-Haddad, S. (2021). Examining the impact of influencers' credibility dimensions: attractiveness, trustwor-thiness and expertise on the purchase intention in the aesthetic dermatology industry. Review of International Business and Strategy, 1-20.
Arifah, J. N., & Dalimunthe, Z. (2020). The impact of financial literacy on the investment decision of non-donation-based crowdfunding in indonesia. International Journal of Business and Society, 21(3), 1045-1057.
Ates, S., Coskun, A., Sahin, M. A., & Demircan, M. L. (2016). Impact of financial literacy on the behavioral biases of individual stock investors: evidence from borsa istanbul. Business and Economics Research Journal, 7(3), 1-19.
Baker, H. K., Kumar, S., Goyal, N., & Gaur, V. (2019). How financial literacy and demographic variables relate to behavioral biases. Managerial Finance, 45(1), 124-146.
Bobe, M. C., & Piefke, M. (2019). Why do we herd in financial contexts? Journal of Neuroscience, Psychology, and Economics, 12(2), 116-140.
Choijil, E., Mendez, C. E., Wong, W. K., Vieito, J. P., & Batmunkh, M. U. (2022). Thirty years of herd behavior in financial markets: a bibliometric analysis. Research in International Business and Finance, 59, 1-13.
Disney, R., & Gathergood, J. (2013). Financial literacy and consumer credit portfolios. Journal of Banking & Finance, 37(7), 2246-2254.
Halder, D., Pradhan, D., & Chaudhuri, H. R. (2021). Forty-five years of celebrity credibility and endorsment literature: review and learning. Journal of Business Research, 125, 397-415.
Hovland, C. I., & Weiss, W. (1951). The influence of source credibility on communication effectivness. Public Opinion Quarterly, 15, 635-650.
Kadekova, Z., & Holiencinova, M. (2018). Influencer marketing as a modern phenomenon creating a new frontier of virtual opportunities. Communication Today, 9(2), 90-104.
Kahneman, D., & Tversky, A. (1979). Prospect theory: an analysis of decision under risk. Econometrica, 47(2), 263-292.
Komala, K., & Triono, R. A. (2020). Do a celebrity endorser and live broadcast sponsorship affect purchase intention in the case of PT Yamaha Indonesia Motor Manufacturing (YIMM)? Contemporary Issues in Finance, Accounting, and Consumers' Behavior: Lessons from Indonesia, 269-288.
La Monica, P. R. (2021, January 26). Investing. Retrieved from CNN Business: https://edition. cnn.com/2021/01/26/investing/elon-musk-etsy-twitter/index.html
La Monica, P. R. (2021, February 17). Investing. Retrieved from CNN Business: https://edi-tion.cnn.com/2021/02/17/investing/elon-musk-social-media/index.html
Lim, X. J., Radzol, A. R., Cheah, J. H., & Wong, M. W. (2017). The impact of social media influencers on purchase intention and the mediation effect of customer attitude. Asian Journal of Business Research, 7(2), 19-36.
Mouna, A., & Jarboui, A. (2015). A study on small investors' sentiment, financial literacy and stock returns: evidence for emerging market. International Journal of Accounting and Economics Studies, 3(1), 10-19.
Novianggie, V., & Asandimitra, N. (2019). The influence of behavioral bias, cognitive bias, and emotional bias on investment decision for college student with financial literacy as the moderating variable. International Journal of Academic Research in Accounting, Finance and Management Sciences, 9(2), 92-107.
Ohanian, R. (1990). Construction and validation of a scale to measure celebrity endorsers' perceived expertise, trustworthiness, and attractiveness. Journal of Advertising, 19(3), 39-52.
PACFL. (2008). 2008 annual report to the president. 4-9.
Prosad, J. M., Kapoor, S., & Sengupta, J. (2015). Behavioral biases of indian investors: a survey of delhi-ncr region. Qualitative Research in Financial Markets, 7(3), 230-263.
Sabir, S. A., Mohammad, H. B., Kadir, H. B., & Shahar. (2019). The role of overconfidence and past investment experience in herding behaviour with a moderating effect of financial literacy: evidence from pakistan stock exchange. Asian Economic and Financial Review, 9(4), 480-490.
Shah, S. Z., Ahmad, M., & Mahmood, F. (2018). Heuristic biases in investment decision-making and perceived market efficiency. Qualitative Research in Financial Markets, 10(1), 85-110.
Susanto, S. A., & Anastasia, N. (2019). Herding behavior and decision making within the middle-class residential property investment. Jurnal Akuntansi dan Keuangan, 21(2), 90-100.
Utami, E. S., Aprilia, M. R., & Putra, I. C. (2021). Financial literacy of micro, small and medium entreprises of consumption sector in probolinggo city. Jurnal Manajemen dan Kewirausahaan, 23(1), 10-17.
Wanidwaranan, P., & Padungsaksawasdi, C. (2020). The effect of return jumps on herd behavior. Journal of Behavioral and Experimental Finance, 27, 1-11.
Zhang, W. (2020). Application of crowd thought and herd behavior in economic investment. Revista Argentina de Clinica Psicologica, XXIX(1), 328-333.
Downloads
Published
How to Cite
Issue
Section
License
Authors who publish with this journal agree to the following terms:
- Authors retain the copyright and publishing right, and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) followingthe publication of the article, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).<a href="http://creativecommons.org/lice