Cause and Effect Analysis of Stock Market Crash during 2010-11 and Investors’ Impression

Abstract

The stock market is one of the most important sources for companies to raise capital. This study‟s main objective is to
find out cause and effect of stock market crash in Bangladesh especially in the year of 2010-11 when a massive crash
took place in Dhaka Stock Exchange and to find out impression of investors about the capital market as an effect of
the market crash. While conducting this research, 180 investors were selected from DSE and out of those 150
investors‟ responses properly. The response rate is 83 percent. A questionnaire has been prepared for this study that
consists of different questions on four dimensions of investors for investment in DSE. In this study, some statistical
measures such as factor analysis using Principal Component Analysis (PCA) with Varimax Rotation and Regression
Analysis, mean, z test and proportion analysis are used to examine cause & effect of stock market crash during 2010-
11 and investors‟ impression. This paper will help both investors and policy makers to know the cause and effect after
stock market crash and to make proper decisions in the future.