Sociological Analysis of the Role of Cultural and Social Factors on Investor Behavior in the Iranian Capital Market

Abstract

Objective: This study aims to conduct a sociological analysis and in-depth analysis of the role of cultural and social factors in shaping the behavior of investors in the Iranian capital market, and to present a contextualized interpretive model based on the perspective of government and academic elites.

Method: The research was conducted with a qualitative approach and grounded theory method. The participants in the study were 20 economic and social elites, including two groups of government elites (senior capital market managers and policymakers) and academic elites (university professors specializing in economics, economic sociology, and behavioral finance), who were selected using purposive and snowball sampling methods.Data were collected through in-depth semi-structured interviews and analyzed using the systematic procedure of Strauss and Corbin in three stages of open, axial and selective coding. The validity of the findings was ensured by observing the criteria of validity, transferability, reliability and confirmability. Findings: Data analysis led to the identification of 68 primary concepts, 16 indicators and 5 main categories including social factors, cultural factors, government interventionism, time and convenience. Among social factors, social capital with 89 repetitions (19.60% of the total categories) and knowledge, information and experience with 57 repetitions (12.56%) played the most prominent role. In the field of cultural factors, mass media and virtual networks emerged as the most powerful norm-setting factor with 102 repetitions (22.47%), and reference groups (33 repetitions) and fashionism (34 repetitions) were ranked next.Government interventionism, with an emphasis on the “government-owned nature of the stock market,” was identified as a dual trust-building and risk-generating factor with 29 repetitions (39.6%). The research paradigm model with the central category of “capital market as a battleground for trust” revealed three distinct logics of action: government elites with the logic of “stabilizing the market and attracting public participation,” academic elites with the logic of “exposing structural inefficiencies and promoting institutional rationality,” and retail investors with the logic of “reducing uncertainty and preserving asset value.”

Conclusion: The behavior of investors in the Iranian capital market cannot be explained by mere rational-economic models; rather, this behavior is deeply “embedded” in a network of social relations, cultural beliefs, institutional structures, and collective meaning-making processes.The main problem of the Iranian capital market is not a lack of liquidity, but a “crisis of institutional trust” and the dominance of “personal trust” over “vertical trust.” The structural gap between the different logics of action of government elites, academic elites, and retail investors reinforces the cycle of reproducing distrust. Transitioning from this situation requires redefining the state-market relationship, discursive management of the media, investing in financial and media literacy, and empowering underprivileged groups, including women. The development of the capital market in Iran is not a purely technical-economic project, but rather a socio-cultural project that requires redefining norms, rebuilding trust, and rearranging the state-nation relationship in the economic arena.