Investigating the Impact: Financial Literacy, Socio-Economic Status, and Awareness on Investment Decisions with Moderation Factors
DOI:
https://doi.org/10.9744/petraijbs.7.1.19-27Keywords:
Awareness, Financial Literacy, Investment Decision, Investment Scams, Socio-Economic StatusAbstract
Investment decisions must be made appropriately so that investors are not trapped by investment scams. But in fact, cases of investment scams are increasingly rampant in Indonesia. The primary objective of this paper is to highlight the lack of financial literacy as one of the elements that might be responsible for Indonesia's substantial number of investment scam victims. To investigate the association between financial literacy, SES, awareness, and investment decisions, the model put out in this research employs logistic regression analysis. The results show that financial literacy has an impact on investment decisions, while SES has no influence on investment decisions. Awareness of fraudulent investments can moderate the relationship between financial literacy and investment decisions but cannot moderate SES on investment decisions. This study exhorts investors to base their investment choices on their financial literacy rather than on outside influences. Financial literacy training programs should be developed by the government, financial institutions, and educational institutions.
References
Arianti, B. F. (2018). The influence of financial literacy, financial behavior and income on invest¬ment decision. Economics and Accounting Journal, 1(1), 1–10.
Arif, K. (2015). Financial literacy and other factors influencing individuals’ investment decision: Evidence from a developing economy (Pakistan). In An International Peer-reviewed Journal (Vol. 12). www.iiste.org
Atmaningrum, S., Kanto, D. S., & Kisman, Z. (2021). Investment decisions: The results of knowledge, income, and self-control. The Asian Institute of Research Journal of Economics and Business, 4(1), 100–112. https://doi.org/10.31222/osf.io/cz8uk
Bodie, Z., Kane, A., & Marcus, A. J. (2021). Invest-ments (12th Edition). McGraw-Hill Education, 2021.
Bucciol, A., Quercia, S., & Sconti, A. (2021). Promoting financial literacy among the elderly: Consequences on confidence. Journal of Economic Psychology, 87, 102428. https://doi.org/10.17632/76kcwsgs94.1
Clarence, J. & Pertiwi, D. (2023). Financial management behavior among students: the influence of digital financial literacy. International Journal of Financial and Investment Studies (IJFIS), 4(1), 9-16. https://doi.org/10.9744/ijfis.4.1.9-16
Deshmukh, P., & Akkilagunta, S. (2020). Socio-economic status: A theoretical framework for the development and use of assessment tools. Indian Journal of Community and Family Medicine, 6(1), 4. https://doi.org/10.4103/ijcfm.ijcfm_32_20
Dihni, V. A. (2022, March 31). Realisasi investasi Indonesia naik terus dalam 5 tahun terakhir. https://databoks.katadata.co.id/datapublish/2022/03/31/realisasi-investasi-indonesia-naik-terus-dalam-5-tahun-terakhir
Farley, A. (2022, September 28). Why should I consider investing? Retrieved from https://www. investopedia.com/ask/answers/why-should-i-invest/
Goyal, K., & Kumar, S. (2021). Financial literacy: A systematic review and bibliometric analysis. In International Journal of Consumer Studies, 45(1), 80–105. https://doi.org/10.1111/ijcs.12605
Grohmann, A., & Menkhoff, L. (2020). The relationship between financial literacy and financial inclusion. Retrieved from http://www.diw.de/discussionpapers
Handayani, I. (2022, April 6). Ternyata, tiga faktor ini jadi penyebab masyarakat terjerat investasi bodong. Retrieved from https://investor.id/market-and-corporate/289770/ternyata-tiga-faktor-ini-jadi-penyebab-masyarakat-terjerat-investasi-bodong
Harsoyo, E. C., & Zulaikha. (2021). The impact of investor awareness levels of the red flagging on investment decisions with investor risk tolerance as intervening variable. International Journal of Business, Economics and Law, 24(6).
Hendarto, K., Anastasia, N., & Basana, S. R. (2021). The effect of financial literacy, financial risk tolerance, and financial socialization agents on stock investment decision in the millennial generation. Petra International Journal of Business Studies, 4(1), 11–22. https://doi.org/10.9744/ijbs.4.1.11-22
Hidajat, T., Primiana, I., Rahman, S., & Febrian, E. (2021). Why are people trapped in ponzi and pyramid schemes? Journal of Financial Crime, 28(1), 187–203. https://doi.org/10.1108/JFC-05-2020-0093
Jappelli, T., & Padula, M. (2015). Investment in financial literacy, social security, and portfolio choice. Journal of Pension Economics and Finance, 14(4), 369–411. https://doi.org/10.1017/S1474747214000377
Kagan, J. (2023, August 30). Personal income definition & difference from disposable income. Retrieved from https://www.investopedia.com/terms/p/personalincome.asp
Kasim, E. S., Awalludin, N. R., Zainal, N., Ismail, A., & Ahmad Shukri, N. H. (2023). The effect of financial literacy, financial behaviour and financial stress on awareness of investment scams among retirees. Journal of Financial Crime. https://doi.org/10.1108/jfc-04-2023-0080
Kasoga, P. S., & Tegambwage, A. G. (2022). Psychological traits and investment decisions: the mediation mechanism of financial management behavior – evidence from the Tanzanian stock market. Journal of Money and Business, 2(2), 213–227. https://doi.org/10.1108/jmb-05-2022-0028
KSEI. (2022). Statistik pasar modal Indonesia. Retrieved from www.ksei.co.id
Kuhnen, C. M., & Miu, A. C. (2017). Socioeconomic status and learning from financial information. Journal of Financial Economics (JFE), Forth-coming. http://ssrn.com/abstract=2608192Electroniccopyavailableat:https://ssrn.com/abstract=2608192Electroniccopyavailableat:http://ssrn.com/abstract=2608192
Lie, S., Astuti, D., & Malelak, M. I. (2023). The effect of financial literacy and demographics on the saving behavior of the millennial generation. International Journal of Financial and Investment Studies (IJFIS), 3(2), 110-118. https://doi.org/10.9744/ijfis.3.2.110-118
Lusardi, A. (2019). Financial literacy and the need for financial education: evidence and implications. Swiss Journal of Economics and Statistics, 155(1). https://doi.org/10.1186/s41937-019-0027-5
Mouna, A., & Jarboui, A. (2015). Financial literacy and portfolio diversification: An observation from the Tunisian stock market. International Journal of Bank Marketing, 33(6), 808–822. https://doi.org/10.1108/IJBM-03-2015-0032
Natalia, M. (2022, August 12). Ini penyebab milenial dan generasi z ramaikan tren investasi. Retrieved from https://economy.okezone.com/read/2022/08/12/320/2646766/ini-penyebab-milenial-dan-gen-z-ramaikan-tren-investasi
Navarro-Carrillo, G., Alonso-Ferres, M., Moya, M., & Valor-Segura, I. (2020). Socioeconomic status and psychological well-being: revisiting the role of subjective socioeconomic status. Frontiers in Psychology, 11. https://doi.org/10.3389/fpsyg.2020.01303
OECD. (2017). PISA 2015 results (volume iv): student’s financial literacy. http://dx.doi.org/10.1787/9789264270282-en
Padil, H. M., Kasim, E. S., Muda, S., Ismail, N., & Zin, N. M. (2022). Financial literacy and awareness of investment scams among university students. Journal of Financial Crime, 29(1), 355–367. https://doi.org/10.1108/JFC-01-2021-0012
Paramita, R. S., Isbanah, Y., Kusumaningrum, T. M., Musdholifah, & Hartono, U. (2018). Young in-vestor behavior: Implementation theory of planned behavior. Article in International Journal of Civil Engineering and Technology, 18(7), 733–746.
Prasad, S., Kiran, R., & Sharma, R. K. (2021). Behavioural, socio-economic factors, financial literacy and investment decisions: Are men more rational and women more emotional? The Indian Economic Journal, 69(1), 66–87. https://doi.org/10.1177/0019466220987023
Rahman, M., & Gan, S. S. (2020). Generation y invest-ment decision: An analysis using behavioural factors. Managerial Finance, 46(8), 1023–1041. https://doi.org/10.1108/MF-10-2018-0534
Reserve Bank of Fiji. (2019). Why do we need to invest? Retrieved from https://www.rbf.gov.fj/why-do-we-need-to-invest/
Saeedi, A., & Hamedi, M. (2018). Financial literacy empowerment in stock market. Spinger Inter-national Publisihing Palgrave Pivot.
Singh, K. N., & Misra, G. (2022). Victimisation of investors from fraudulent investment schemes and their protection through financial education. Journal of Financial Crime. https://doi.org/10.1108/JFC-07-2022-0167
Wareza, M. (2021, August 5). Alamak! Kerugian investasi bodong capai Rp 117 T. Retrieved from https://www.cnbcindonesia.com/mymoney/20210805111927-72-266285/alamak-kerugian-investasi-bodong-capai-rp-117-t
Additional Files
Published
Issue
Section
License
Copyright (c) 2024 Dewi Pertiwi, Adhityawati Kusumawardhani, James Tan Kristiyanto Pratama, Teripena Ika Sampurna Paul
This work is licensed under a Creative Commons Attribution 4.0 International License.
Petra IJBS (e-ISSN: 2621-6426) is published by Master of Management program, School of Business and Management, Petra Christian University, Indonesia (MM SBM PCU).
