Predicting Stock Market Investment Intention and Behavior among Malaysian Working Adults Using Partial Least Squares Structural Equation Modeling

Marvello Yang, Abdullah Al Mamun, Muhammad Mohiuddin, Sayed Samer Ali Al-Shami and Noor Raihani Zainol
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Marvello Yang: Department of Management, Faculty Economic and Business, Widya Dharma University Pontianak, Kota Pontianak, Kalimantan Barat 78243, Indonesia
Abdullah Al Mamun: Faculty of Business and Management, UCSI University, Cheras, Kuala Lumpur 56000, Malaysia
Muhammad Mohiuddin: Faculty of Business Administration, Laval University, Quebec City, QC 2325, Canada
Sayed Samer Ali Al-Shami: Institute of Technology Management and Entrepreneurship, Universiti Teknikal Malaysia Melaka, Durian Tunggal, Melaka 76100, Malaysia
Noor Raihani Zainol: Faculty of Entrepreneurship and Business, Universiti Malaysia Kelantan, Pengkalan Chepa, Kota Bharu 16100, Malaysia

Mathematics, 2021, vol. 9, issue 8, 1-16

Abstract: The purpose of this study was to investigate the effects of risk tolerance, financial well-being, financial literacy, overconfidence bias, herding behavior, and social interaction on stock market investment intention and stock market participation among working adults in Malaysia. Adopting the cross-sectional design, this study collected quantitative data from a total of 349 respondents in an online survey via Google form link across various social media platforms. This study used the partial least squares structural equation modeling (PLS-SEM) approach to test the hypotheses. This study revealed the significant positive effects of risk tolerance, herding behavior, and social interaction on stock market investment intention. Stock market investment intention also had a significant effect on stock market participation. Stock market investment intention was also found to successfully mediate the relationships of risk tolerance and overconfidence bias with stock market participation. When it comes to stock market investment, the government and related authorities should focus on developing programs and policies that provide a financial safety net for investors and promote investment-related social platforms. This study linked risk tolerance, financial well-being, financial literacy, overconfidence bias, herding behavior, social interaction, stock market investment intention, and stock market participation. This is one of the few early attempts to address issues in light of the stock market investment participation among the working adults in a developing country.

Keywords: risk tolerance; financial well-being; financial literacy; overconfidence bias; herding behavior; social interaction; investment intention; stock market participation (search for similar items in EconPapers)
JEL-codes: C (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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