Investor Sentiment: A Thematic Review and Research Agenda

Purpose: This study aims to investigate the concept of investor sentiment and its significance in financial markets. This research seeks to uncover the principal determinants influencing investor sentiment and market behavior through a comprehensive analysis of current academic literature on the subject. Design/methodology/approach: This study integrates quantitative bibliometric analysis and qualitative content analysis to trace the academic development of investor sentiment research, focusing on publishing trends, key contributors, and influential studies. We delineate the intellectual structure of investor sentiment research by identifying key themes and put up research enquiries to develop pathways for future research investigation by examining 154 articles identified through PRISMA protocol. Findings: The findings suggests that most articles focus on stock markets, highlighting a need for further exploration in derivative markets, cryptocurrencies and other financial markets. Additionally, our study reveals three major research areasD: 1) aggregate and cross- sectional impact of investor sentiment on financial markets' performance; 2) seasonality anomalies or calendar effects; 3) market connectedness. Research limitations/implications: This study aims to provide regulators, investors, and academicians with a comprehensive understanding of investor sentiment, including its intricacies and details. This understanding will help regulators in developing policies to stabilize markets, to improve market efficiency, and will provide insights to academicians in enhancing predictive financial investing models. Originality/value: This work is distinctive as it represents the first thorough literature analysis in the domain of investor sentiment research employing content analysis along with bibliometric quantitative analysis. The authors believe t his study will o ffer a c omprehensive and b roader p erspective on t he e x tent o f academic interest i n this topic and pinpoint existing research gaps in the current literature.