Impact of Social Media on Investment Decision

Impact of Social Media on Investment Decision

Author Name : Asst. Prof. Jyoti Nain, Sumit Kumar

ABSTRACT

While finance has been studied for several years, behavioural finance, an area that studies how psychological influences can affect market outcomes, is still relatively new, and this subject remains wide open for greater exploration.

Social media, which has experienced rapid growth and is now a fundamental part of everyday life, is recognized as key to predicting future outcomes, leading to several studies exploring this subject. Despite this, there is not a great deal of research on how the content on social media affects other real-life time-dependent events. This study addresses that concern while it also explores the field of behavioural finance.

The research aims to study the impact of social media on investment decisions, focusingon the Swedish stock market. The study uses a quantitative method, and the data is collected from questionnaires designed through Google Forms, followed by an analysis using Microsoft Excel software.

 

To have an improved grasp of the extent to which social media influences investment decisions and understand the elements of online social media and the depth of their involvement, we will break down this area into three dimensions, which will be assessed.

The three dimensions of social media that will be examined are information from social media, online community behaviour, and firm image.

This study's findings established a relationship between social media and investment decision, and these three independent variables positively correlate with the dependent variable (investment decision). In other words, the results of this study have proven that social media does have an impact on investment decisions.

This study aims to contribute to literature for future financial research on a relevant topicthat examines the effect of social networks on movement in capital markets.