THE BENCHMARK OF INVESTOR DECISIONS TO INVEST IN THE INITIAL PUBLIC OFFERING (IPO)

Abstract

This study aimed at examining the influence of the benchmark used by investors in the investment decision-making process at IPO. The dependent variable in this study was the investment decision while the independent variables were in the form of financial behavior bias consisting of underwriter reputation, CEO reputation, financial statement, representativeness bias, availability bias, overconfidence bias, and self-control bias. Primary data were collected by giving questionnaires to investors who invest at IPO. The population was investors in Yogyakarta with sample of 100 respondents taken by purposive sampling method according to specified criteria. The questionnaire was tested with a validity test and a reliability test. Furthermore, multiple regression analysis was used to test the hypothesis. The results of this study indicated that underwriter reputation, CEO reputation, financial statements, representativeness bias, and availability bias did not affect investment decision-making during the IPO process. While overconfidence bias and self-control bias had a significant positive effect on investment decision-making during the IPO process.