Meta-Analysis On Overconfidence In Investment Performance Evidence From Global Markets
Keywords:
Excessive Confidence, Kinerja Investasi, Meta-Analisis, Investment Education
Abstract
Overconfidence is one of the cognitive biases that can affect investment decisions. Overconfident investors tend to make high-risk and poorly informed investment decisions, which can lead to poor investment performance. This study aims to conduct a meta-analysis to systematically and comprehensively review the effect of excessive confidence on investment performance in global markets. This study aims to conduct a meta-analysis to systematically and comprehensively review the effect of excessive confidence on investment performance in global markets. A literature search is conducted through various scientific databases to identify relevant studies. Inclusion and exclusion criteria are applied to select studies that meet quality and relevance standards. Data were extracted from selected studies and analyzed using meta-analysis statistical methods. The results of the meta-analysis showed that excessive confidence had a significant influence on investment performance with a Hedge's value (d) = 0.703 with a medium effect size criterion. Overconfident investors tend to have portfolios with lower returns and higher risks compared to investors who are not overconfident.
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Badawi et al.,. (2023). Integration of Blended Learning and Project-Based Learning (BPjBL) on Achievement of Students’ learning goals: A Meta-analysis study. Pegem Journal of Education and Instruction, 13(4). https://doi.org/10.47750/pegegog.13.04.32
Bajzik, J. (2021). Trading volume and stock returns: A meta-analysis. International Review of Financial Analysis, 78, 101923. https://doi.org/10.1016/j.irfa.2021.101923
Brunzel, J. (2021). Overconfidence and narcissism among the upper echelons: A systematic literature review. Management Review Quarterly, 71(3), 585–623. https://doi.org/10.1007/s11301-020-00194-6
Buser, T., Grimalda, G., Putterman, L., & Van Der Weele, J. (2020). Overconfidence and gender gaps in redistributive preferences: Cross-Country experimental evidence. Journal of Economic Behavior & Organization, 178, 267–286. https://doi.org/10.1016/j.jebo.2020.07.005
Cragun, O., Olsen, K., & Wright, P. (2019). Making CEO Narcissism Research Great: A Review and Meta-Analysis of CEO Narcissism. Journal of Management, 46, 014920631989267. https://doi.org/10.1177/0149206319892678
Dessí, R., & Zhao, X. (2018). Overconfidence, stability and investments. Journal of Economic Behavior & Organization, 145, 474–494. https://doi.org/10.1016/j.jebo.2017.11.030
Erol, K. (2023). Cognitive Biases in Finance and Marketing Literature: A Meta-Analysis Approach. The Journal of Academic Social Resources, Cilt 8 Sayı 46(Cilt 8 Sayı 46), 2215–2224. https://doi.org/10.29228/ASRJOURNAL.68346
Grezo, M. (2020). Overconfidence and financial decision-making: A meta-analysis. Review of Behavioral Finance, ahead-of-print. https://doi.org/10.1108/RBF-01-2020-0020
Hii, I. S. H., Li, X., & Zhu, H. (2023). Behavioural Biases and Investment Decisions during COVID-19: An Empirical Study of Chinese Investors. Jurnal Institutions and Economies, 15(3), 81–103. https://doi.org/10.22452/IJIE.vol15no3.4
Ige, B. O., & Adebayo, R. O. (2024). The influences of psychological factors on investors decision making in the South African derivative market. International Journal of Research in Business and Social Science (2147- 4478), 13(1), 267–278. https://doi.org/10.20525/ijrbs.v13i1.2877
Katsoulis, V. (n.d.). Essays on Corporate Governance: SRI Investing, Skill heterogeneity on Firm Performance and Value Creation through M&As.
Kraft, P. S. (2022). The double-edged sword of CEO narcissism: A meta-analysis of innovation and firm performance implications. Journal of Product Innovation Management, 39(6), 749–772. https://doi.org/10.1111/jpim.12649
Lian, H., Ding, X., Zhang, H., & Wang, X. (2020). Short-term effect of stock volatility and cardiovascular mortality: A systematic review and meta-analysis. Annals of Translational Medicine, 8(20), 1317. https://doi.org/10.21037/atm-20-6557
Lotus, M. (2023). Overconfidence bias in bank customers’ investment decisions. https://doi.org/10.13140/RG.2.2.21368.42244
Oktarina, K., Santosa, T. A., Razak, A., Ahda, Y., & Putri, D. H. (2021). Meta-Analysis: The Effectiveness of Using Blended Learning on Multiple Intelligences and Student Character Education during the Covid-19 Period. 4(3).
Patel, M. (2021). Emerging trends of immersive media in India – Augmented Reality (AR), Virtual Reality (VR) and Mixed Reality (MR) case.
Putra, M., Rahman, A., Ilwandri, I., Suhayat, Y., Santosa, T. A., Putra, R., & Aprilisia, S. (2023). The Effect of STEM-Based REACT Model on Students’ Critical Thinking Skills: A Meta-Analysis Study. LITERACY : International Scientific Journals of Social, Education, Humanities, 2(1), Article 1. https://doi.org/10.56910/literacy.v2i1.560
Reyes, T., Vassolo, R. S., Kausel, E. E., Torres, D. P., & Zhang, S. (2022). Does overconfidence pay off when things go well? CEO overconfidence, firm performance, and the business cycle. Strategic Organization, 20(3), 510–540. https://doi.org/10.1177/1476127020930659
Shahar, W., Ahmad, N., & Jaafar, M. (2021). CEO Overconfidence, International Diversification Strategy, and Capital Structure of the Shariah-Compliant Industrial Sector. The Empirical Economics Letters, 20, 1–19.
Shirodkar, V., & Konara, P. (n.d.). Multinational enterprises’ lobbying and foreign subsidiary performance: Evidence from the U.S. in the context of the global financial crisis. European Management Review, n/a(n/a). https://doi.org/10.1111/emre.12655
Singh, D., Malik, G., Jain, P., & Abouraia, M. (2024). A systematic review and research agenda on the causes and consequences of financial overconfidence. Cogent Economics & Finance, 12(1), 2348543. https://doi.org/10.1080/23322039.2024.2348543
So, M. (2022). Analysis of the influence of enterprise managers’ overconfidence on the overinvestment behavior of listed companies under the media reports. Frontiers in Psychology, 13, 1018189. https://doi.org/10.3389/fpsyg.2022.1018189
Utomo, W., Suryono, W., Jimmi, J., Santosa, T. A., & Agustina, I. (2023). Effect of STEAM-Based Hybrid Based Learning Model on Students’ Critical Thinking Skills. Jurnal Penelitian Pendidikan IPA, 9(9), 742–750. https://doi.org/10.29303/jppipa.v9i9.5147
Zigraiova, D., Havranek, T., & Novak, J. (n.d.). How Puzzling Is the Forward Premium Puzzle? A Meta-Analysis.
Zulkifli, Z., Satria, E., Supriyadi, A., & Santosa, T. A. (2022). Meta-analysis: The effectiveness of the integrated STEM technology pedagogical content knowledge learning model on the 21st century skills of high school students in the science department. Psychology, Evaluation, and Technology in Educational Research, 5(1), Article 1. https://doi.org/10.33292/petier.v5i1.144
Published
2024-07-17
Section
Articles
Copyright (c) 2024 Florentina Sinarce Dewi, Noor Syaifuddin, Andi Harmoko Arifin
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
