Journal of Economics, Finance and Administrative Science

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Author: search.filters.author.Gaio, Luiz EduardoStart date: 2020

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    Behavioural finance: the decoy effect on stock investment decisions
    (Universidad ESAN. ESAN Ediciones, 2023-12-11) Okumura, Bruno Uekane; Pimenta Junior, Tabajara; Maemura, Marcia Mitie Durante; Gaio, Luiz Eduardo; Gatsios, Rafael Confetti
    Purpose: This study aims to investigate the occurrence of the decoy effect in stock investment decisions based on fundamental analysis. Design/methodology/approach: In this study, the decoy effect was investigated by applying two questionnaires, one of them with the presence of a decoy alternative, to a set of 224 respondents with knowledge of business fundamentals, simulating investment decisions in stocks of companies listed on the Brazilian Stock Exchange. The data analysis was performed using the Fisher's exact test, Student's t-test and ANOVA. The research also aimed to detect a potential relationship between the variables gender, age, degree and professional experience with the type of decision made. Findings: The results pointed to the occurrence of the decoy effect when analysing the general response data. However, such evidence was not confirmed when the sample was analysed by classes (gender, course, age and professional experience). There is no statistical evidence that the decoy effect influences classes. Originality/value: The recent decoy effect literature is little explored in investment decision-making. This study is unique in examining the decoy effect in investment decisions in the Brazilian context.
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    The impact of rating classifications on stock prices of Brazilian companies
    (Universidad ESAN. ESAN Ediciones, 2021-06-30) Pagin, Fernanda; Gomes, Matheus da Costa; Antônio, Rafael Moreira; Júnior, Tabajara Pimenta; Gaio, Luiz Eduardo
    Purpose. This paper aims to identify if there is an impact of the rating announcements issued by the agencies on the returns of the stocks of Brazilian companies listed on Brasil Bolsa Balcão, from August 2002 to August 2018, identifying which types of announcement (upgrade, downgrade or the same initial classification) cause variations in prices around the date of disclosure of the rating. Design/methodology/approach. The event study methodology was applied to verify the market reaction around the announcement dates in a 21-day event window (−10, +10). The market model was used to calculate the abnormal returns (ARs), and subsequently, the accumulated ARs. Findings. The hypotheses tests allowed to verify that the accumulated ARs are different, before and after the three types of rating announcements (upgrades, downgrades and the same classification); in upgrades, the mean of accumulated ARs increases in the days before the event, while in downgrades, this increase occurs after the event. This paper concluded that the rating announcements have an impact on the return of stock of the Brazilian market and that the market reaction occurs most of the time before the event happens, which indicates that the market can anticipate the information contained in the changes in credit ratings. Practical implications. The results have considerable implications for portfolio managers, institutional investors and traders. It facilitates investment decision-making in the face of rating classification announcements. Market participants can pay more attention to their investment strategies and asset allocation during periods of risk rating announcements. Additionally, traders can understand the form of investment strategy for superior earnings. Originality/value. The importance of the study is related to the fact that the results may explain the causes of specific movements in the Brazilian financial market related to a source of information that may or may not be able to influence the decisions of the financial agents that operate in this market. The justification is centred on the idea that, for investors who somehow react to the announcements, it is relevant to understand the impact of rating classifications on companies, as access to such information allows for more conscious decision-making.