“A study of factors affecting investment decisions in India: The KANO way”

Behavioural finance is emerging field with wide scope. In the absence of enough of literature in Indian context, understanding of individual investor’s behaviour towards stock market by the policy makers, institutions, market infrastructure institutions, and companies find it challenging. The behaviour is caused by the reaction to different factors/attributes. In order to understand the factors that influence the investor’s investment decision a study was undertaken in Indian stock market consisting of 10 sectors with 30 companies listed on BSE-30 SENSEX. A research instrument consisting of 14 attributes was designed and sent to 2100 respondents. 467 responses were collected over a period of 6 months and KANO model was developed to classify the information into ‘must be’, ‘linear’, and ‘delight’ attributes. It was found that ‘must be’ attributes include condition of financial statements, current economic indicators, and the result of technical analysis and ‘insider information’ is a ‘delight’ attribute. The study revealed the factors are affecting the decision making of investors. The consideration of factors for investment decision making is sector specific and helps various parties in understanding the investment decision behaviour of investors’.