CONCEPTUAL FRAMEWORK OF NEWS INFORMATION AND INVESTOR BEHAVIOUR ON HERDING IN GREEN INVESTMENTS

Abstract

This study explores the mediation effect of news sentiment on the relationship between historical performance, stock sentiment, market uncertainty, and herding behavior in green investments, grounded in behavioral finance and information asymmetry theories. By analyzing the interplay among these variables, the research highlights how historical performance influences investor behavior through a bandwagon effect, while stock sentiment and market uncertainty encourage risk-averse strategies during volatile periods. News sentiment significantly shapes these dynamics by either amplifying or mitigating herding behavior based on the nature of news coverage. The findings underscore the importance of news as a critical mediator in the investment decisions of green stocks, providing insights into the mechanisms of sustainable finance and offering strategic guidance for navigating the complexities of green investment markets.