Investigating the Relationship Between Investors' Behavior and Managers' Expected Returns in the Tehran Stock Exchange

Document Type : Research Paper

Authors

1 Ph.D. Candidate in Financial Engineering, Department of Accounting and Finance, Yazd University, Yazd, Iran

2 Associate Prof, Department of Accounting and Finance, Yazd University, Yazd, Iran

10.22059/ijms.2025.369971.676448

Abstract

Behavioral finance is the investigation of distortions and irregularities in the behavior of investors. Herding behavior, as an instance of such distortions, is not limited to investors alone, as corporate managers also exhibit this type of turmoil. The collective behavior of investors and managers can create asset bubbles, causes market inefficiencies, and slows the incorporation of new information into stock prices. It also causes managers to focus on short-term results at the expense of long-term value creation. Understanding these consequences is crucial for investors to make more informed decisions. The present study, using the composite data model from  2021 to 2024, selects and studies a sample of 156 firms listed on the Tehran Stock Exchange by the systematic elimination method. The results of this study indicate that the investors' herding behavior affects the expected returns of shareholders; however, the effects of the herding behavior of managers are not statistically significant.

Keywords

Main Subjects

References

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Interdisciplinary Journal of Management Studies (Formerly known as Iranian Journal of Management Studies)
Volume 18, Issue 2
April 2025
Pages 257-274

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