Journal of Management Information and Decision Sciences (Print ISSN: 1524-7252; Online ISSN: 1532-5806)


The Impact of Corporate Investment Behaviour on the Corporate Performance: Evidence from an Emerging Market

Author(s): Hasan Subhi Hasan Hussein Alabass

Decision making in investment often includes conflicts in information and subjective judgment of the investors and managers behaviours. The main purpose of this paper is to investigate the Impact of corporate investment behaviour on the corporate performance. Using model for corporate investment herding behaviour, this study explore the presence of managers’ investment herding bias at corporate-level, and its ultimate impact on corporate performance. The study employs the micro level data of 500 listed firms of Pakistan stock exchange from period of 2010 to 2015. Empirical analysis shows that managers’ herding behaviour positively and significantly affect the corporate performance. The results are robust under exogenous shocks on corporate performance. Thus, the study offers useful policy implication to the corporate stakeholders to device the policies accordingly.

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