How Millennials Make Investment Decisions: Financial Literacy and Financial Behavior

Dewi Tamara and Anita Maharani
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Dewi Tamara: Binus Business School Master Program, Bina Nusantara University, Jakarta, Indonesia
Anita Maharani: Binus Business School Master Program, Bina Nusantara University, Jakarta, Indonesia

Economics and Finance in Indonesia, 2024, vol. 70, 132-146

Abstract: This study investigates the effect of financial literacy, financial attitude, risk perception, and financial behavior on investment decisions. Employing a survey method with 342 respondents in Jakarta, the findings reveal that financial literacy has a negative and insignificant effect on investment decisions. In contrast, risk perception plays a crucial role in influencing investment decisions. Furthermore, financial behavior has an indirect mediating effect between financial literacy and risk perception on investment decisions but does not affect financial attitude. This study concludes that risk perception and financial behavior are important factors in investment decisions. Future research may consider incorporating other variables such as herding behavior or overconfidence.

Keywords: investment decisions; financial literacy; financial attitude; risk perception; financial behavior (search for similar items in EconPapers)
JEL-codes: G11 G40 G41 G53 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:lpe:efijnl:202409

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