Do equity investors’ socio economic identities have association with their perceived risk? Evidence from the emerging market

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Abstract

Equity investors’ decision-making efficacy can be enhanced by enlarging the understanding horizon on the matrix between their socio-economic identities and risk perception (Su et al., 2022; Shah et al., 2020). This work attempts to examine the relationship between equity investors’ socio-economic identities and their perceived risk in Assam, a state in North-East India. The study uses a structured instrument that undergoes a pretest to assess its content validity using Lawshe’s (1975) content validity ratio (CVR) method. The study applied Cronbach’s alpha to test the instrument reliability of 15 items which stood at 0.749. The study employed a comprehensive sample size of 408 retail investors, picked up using a systematic random sampling technique, hailing from the cities of Guwahati and Silchar in the state of Assam (response rate: 69.54 percent). The findings of the study indicated that there is a substantial inverse relationship between age and income, and equity investors’ total risk perception. However, the effect of investing experience on risk perception was found to be insignificant. Previous research has also reported similar findings (Bairagi & Chakraborty, 2018). Despite the limitations inherent in the study, such as the sample size being confined to a certain geographic location or demographic group, it is anticipated that this research will make a valuable contribution to the current body of literature on investor risk behaviour. Additionally, it is intended to have practical implications for brokerage houses, market analysts, and regulators within the financial industry.

Keywords: Equity Investors, Risk Perception, Socio-Economic Identities, Financial Industry, Lawshe’s CVR, North East India

Authors’ individual contribution: Conceptualization — N.B. and A.Y.; Methodology — N.B. and A.Y.; Validation — N.B. and A.Y.; Formal Analysis — N.B.; Investigation — N.B.; Writing — Original Draft — N.B.; Writing — Review & Editing — N.B. and A.Y.; Visualization — N.B. and A.Y.; Supervision — A.Y.; Funding Acquisition — N.B. and A.Y.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: C14, C83, D81, G32, G41

Received: 23.08.2023
Accepted: 15.02.2024
Published online: 19.02.2024

How to cite this paper: Borah, N., & Yarso, A. (2024). Do equity investors’ socio economic identities have association with their perceived risk? Evidence from the emerging market [Special issue]. Corporate & Business Strategy Review, 5(1), 273–282. https://doi.org/10.22495/cbsrv5i1siart2