This paper examines the influence wielded by social media buzz on stock market performances of selected stocks from several ASEAN stock exchanges. The advent of social media has changed the dynamics of information propagation and utilization in stock markets. Though information asymmetry still persists, current literature has only recently caught up with the dominant trend of social media eclipsing traditional media as a source of information. This is an issue of significant complexity and import for stock market actors. Employing a brand-new theoretical model of predicting impact of social media on asset prices—proposed by Jiao, Veiga and Walther—this study gauges the performances of stocks with active social media coverage for a month and finds abnormally high trading volume and volatility in the ensuing month. Though these findings are statistically significant in confirming stale news hypothesis by Tetlock (2011), this study is the first empirical application of Jiao et al.’s model. Therefore, after discussing the implications of these findings, this paper highlights the need for more replication studies to help develop a social-media related theory on asset prices and how this affects regulators’ responsibility of ensuring fair dissemination of information.
Despite the surge of ethical and ecologically tenable green investing and banking alternatives worldwide, such options are yet to proliferate in frontier markets such as Asia. This green industry—if it can be called one—is still in an embryonic stage. Though prominent financial institutions like merchant banks and mutual funds have pledged to operate and invest in a green environment, the adoption rate is still painfully slow. Like most nascent products, the green investment industry still confronts challenges to generate enough interest to grow and stay competitive to the conventional counterparts. This study attempts to investigate the constraining factors which stifle the growth of the green investment industry from a Malaysian perspective. In addition, this study attempts to find ways on how they can increase their market share locally. To attain this objective primary data was collected through survey method in Selangor region. Upon analysis, we found that product awareness is positive and significantly determined the selection of green banking and investment products while rate of return negatively determined the customers’ selection. Hence, customers need to be made more aware of the existence and the philosophy behind such investment products before they choose to opt for it. In addition, rate of return appears to have a weak connection to customers’ preference towards green investment products. It is expected that this study would furnish ideas to the proponents of green philosophy and campaigners of sustainable practices on how to generate more interest in investing in sustainable and earth-friendly economic practitioners.
Unbeknownst to us, we(humans) possess biases and idiosyncratic interpretations that shape our judgments and ideals. Ergo, humans take for granted that other social participants will appreciate their judgments. When this preconceived notion is betrayed by reality, people’s certitude of objectivity forces them to perceive others as biased or unfair. Such cognitive biases can prove costly in hands of individuals at a micro-level and decision-makers at a macro-level. Recent global financial crises indicate that even regulators and policy-makers aren’t immune from self-serving biases that downplay own dispositional biases. If and when left unchecked, cognitive biases threaten a huge waste of efforts and economic resources. At this juncture of 21st century, overwhelming empirical and theoretical literature underscore the deviation of financial markets and human decision making process from the basic assumptions underlying traditional economics finance paradigm that has pervaded since the mid-1900s. Ranging from applying bounded rationality to economic models to Kahneman’s application of prospect theory to economics and financial markets, designers of business school curricula have now access to a smörgåsbord of literature addressing the inescapable issue of cognitive biases. Specifically, for economics and finance professors, this distinction of cognitive (in)coherences and their recognition should be inculcated subliminally in introductory 1st year level courses, and later on progressively through purposive behavioral-neuro economics/finance courses. In this paper, we argue that such bias-proofing redesign promises aiding students in superior decision making, assessing risk, and minimizing biases. After surveying the curricular praxis in Malaysian business schools, we draw attention to the attractive adaptive market hypothesis (AMH), which promises an exciting infusion of the legacy of EMH model, bounded rationality, evolutionary biology, neuroscience and psychology. This article is a plea for reform in light of nascent advances in behavioral/neuro economics and finance.