Investor Trust and Stock Market Participation: Evidence from BIST
Developed financial markets are a necessary element for a healthy economy. A developed financial market also requires a well-functioning technical and legal infrastructure, financial institutions, institutional investors, and a sufficient number of individual investors prone to trading in the markets. More investors with more funds in exchanges, one of the essential elements of financial markets, contribute positively to the stock market and markets. The purpose of this study is to determine the overall level of trust of individual investors in the companies they invest in in the Stock Exchange Istanbul (BIST), to determine the level of relationship between the antecedents of the concept of trust and trustworthiness, cognitive and affective trust. To determine the level of trust that investors invest in stocks of the companies listed in Borsa İstanbul, a survey was conducted with 645 investors in Turkey using the convenience sampling method. The data obtained were analyzed using the structural equation model (SEM) in the Smart-PLS program. According to the findings, it is understood that the overall level of confidence of investors is low. The antecedent trust that has the most significant impact on listed companies' trustworthiness is concern and benevolence (0.460). There is a strong link between trustworthiness and cognitive and affective trust. The findings suggest that policymakers need to create and implement effective policies to increase investor trust.
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