Extending the Theory of Planned Behaviour: Impact of Past Behavioural Biases on the Investment Decision of Indian Investors

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Rajdeep Kumar Raut Niladri Das Rohit Kumar


Manuscript type: Research paper.

Research aims: This paper aims to investigate the applicability of  the Theory of Planned Behaviour (TPB) in examining individuals’ behavioural intention to invest in the capital market. This study ex- tends on the TPB model by considering the role of past behavioural biases (PBB) as a factor in influencing the individuals’ behavioural investment intentions.

Design/ Methodology/ Approach: This paper employs a hypothesis deductive approach. The research model is tested through structural equation modelling (SEM). Data were collected from 396 individuals in Eastern India through a survey and then analysed.

Research findings: The results of this study demonstrate the applicability of the TPB in predicting the individuals’ behavioural intention to invest  in  the  capital  market.  This  study  indicates  that attitude toward behaviour, subjective norms and perceived behavioural control are significantly associated with behavioural intentions. The findings signify that the inclusion of past PBB can improve the predictive power of the model.

Theoretical contributions/ Originality: This study expands on the well-established TPB model by incorporating PBB in examining behavioural intentions. It also extends the applicability of the TPB in the area of investment decision making.

Practitioner/ Policy implications: The findings of this study reveal that behavioural biases are inseparable from normal human beings’ decision making. The reason is because behavioural biases can distort the individuals’ fundamental valuation of stocks. Therefore,  it is imperative that fund managers incorporate this dimension as part of their risk modelling to enhance investment analysis and strategies. The outcome of this study can be used as a guideline for understanding the factors and programmes that need to be instilled to increase online stock trading among current and future investors. Research limitation: This study is limited to non-financial sectors due to measurement limitations.


Keywords: Theory of Planned Behaviour, Past Behavioural Biases, Investment Decision Making.

JEL Classification: G11, G02, C91


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How to Cite
RAUT, Rajdeep Kumar; DAS, Niladri; KUMAR, Rohit. Extending the Theory of Planned Behaviour: Impact of Past Behavioural Biases on the Investment Decision of Indian Investors. AJBA, [S.l.], v. 11, n. 1, p. 265- 291, june 2018. ISSN 2180-3137. Available at: <https://ajba.um.edu.my/article/view/12159>. Date accessed: 17 july 2019. doi: https://doi.org/10.22452/ajba.vol11no1.9.