Relationship Between Information Asymmetry And Individual Investors’ Decision On Investment

Abstract

This research is aimed at assessing the relationship between information asymmetry and individual investor’s decisions on investment in Ghana. Specifically, the study identified the determinants of information asymmetry, investment decision-making process by the individual investors, factors that influence investment decision and how information asymmetry affects investment decisions. The research employed quantitative with explanatory and descriptive research designs. A sample size of 280 individuals who undertake investment formed the basis from which primary data were collected from. The results showed that quality of financial statements; product market share and third party’s opinion were the major determinants of information asymmetry. Many investment decision-making processed were also followed by the investors. Financial information of the investing firm; previous performance of the investing firms’ stock were the leading factors that affect investment decision. There was positively significant association between information asymmetric and investment decisions. The study concluded that there are many determinants of information asymmetric and information asymmetric is influenced by some factors. As there is an improvement in information asymmetry, investment decisions are also well determined. The study recommended that investors have to focus more on the opinions from third parties and also enrich their information asymmetry.