Where Product Design Meets Investor Behavior: How do individual investors' evaluations of companies' product design influence their investment decisions?

Abstract

Do investors in the stock market care about companies' product design when making investment decisions? The dissertation at hand sheds light on this ques¬tion by studying how investors' subjective evaluations of a company's prod¬ucts influence their willingness to invest in the company's stock. The focus is on individual investors, and the reported empirical studies in¬clude quantitative surveys and an experiment, conducted among Finnish individual investors. The studies show that positive product design evaluations tend to (a) gen¬erate optimism about the financial returns of a company's stock - and (b) even elicit "extra willingness" to invest in the company, over and beyond its expected financial returns. Specifically, both optimism about a company's financial returns and "ex¬tra willingness" to invest in it (beyond financial returns) are positively in¬fluenced by two product design -related factors. The first factor is (1) the personal relevance that an investor attaches to "domains of life" that the company's products represent or support. Such domains can be various activities or areas of interest (e.g., road traveling, gardening, sport, electronics, aeronautics) - or more abstract themes or ideals (e.g., mo¬bility, healthcare, environment-protection).The second influential factor is (2) the in¬vestor's overall affect or liking for a company's product design. This factor reflects the degree to which the investor perceives the company's products to be pleasant, attractive, good, and like¬able overall. The results imply that companies can utilize product design's potential to attract investments - from investors who are appealed by the company's products and their design. Also "hybrid" business models can be created, which are based already at the outset, on certain investors' fondness of the company's current or future product design.