IDEAS home Printed from https://ideas.repec.org/a/gam/jmathe/v9y2021i8p873-d536931.html
   My bibliography  Save this article

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

Author

Listed:
  • 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)

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.

Suggested Citation

  • Marvello Yang & Abdullah Al Mamun & Muhammad Mohiuddin & Sayed Samer Ali Al-Shami & Noor Raihani Zainol, 2021. "Predicting Stock Market Investment Intention and Behavior among Malaysian Working Adults Using Partial Least Squares Structural Equation Modeling," Mathematics, MDPI, vol. 9(8), pages 1-16, April.
    • Handle: RePEc:gam:jmathe:v:9:y:2021:i:8:p:873-:d:536931
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2227-7390/9/8/873/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2227-7390/9/8/873/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Liang, Pinghan & Guo, Shiqi, 2015. "Social interaction, Internet access and stock market participation—An empirical study in China," Journal of Comparative Economics, Elsevier, vol. 43(4), pages 883-901.
    2. Ajzen, Icek, 1991. "The theory of planned behavior," Organizational Behavior and Human Decision Processes, Elsevier, vol. 50(2), pages 179-211, December.
    3. Kukacka, Jiri & Barunik, Jozef, 2013. "Behavioural breaks in the heterogeneous agent model: The impact of herding, overconfidence, and market sentiment," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 392(23), pages 5920-5938.
    4. Neha Garg & Shveta Singh, 2018. "Financial literacy among youth," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 45(1), pages 173-186, January.
    5. Sayyed Sadaqat Hussain Shah & Xia Xinping & Muhammad Asif Khan & Sinan Abdullah Harjan, 2018. "Investor and Manager Overconfidence Bias and Firm Value: Micro-Level Evidence from the Pakistan Equity Market," International Journal of Economics and Financial Issues, Econjournals, vol. 8(5), pages 190-199.
    6. Aamir Sarwar & Ghadeer Afaf, 2016. "A comparison between psychological and economic factors affecting individual investor’s decision-making behavior," Cogent Business & Management, Taylor & Francis Journals, vol. 3(1), pages 1232907-123, December.
    7. Zandri Dickason-Koekemoer & Suné Ferreira, 2019. "A conceptual model of financial well-being for south african investors," Cogent Business & Management, Taylor & Francis Journals, vol. 6(1), pages 1676612-167, January.
    8. Saeed Ahmad Sabir & Hisham Bin Mohammad & Hanita Binti Kadir Shahar, 2019. "The Role of Overconfidence and Past Investment Experience in Herding Behaviour with a Moderating Effect of Financial Literacy: Evidence from Pakistan Stock Exchange," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 9(4), pages 480-490, April.
    9. Spyros Spyrou, 2013. "Herding in financial markets: a review of the literature," Review of Behavioral Finance, Emerald Group Publishing Limited, vol. 5(2), pages 175-194, November.
    10. Niu, Geng & Zhou, Yang & Gan, Hongwu, 2020. "Financial literacy and retirement preparation in China," Pacific-Basin Finance Journal, Elsevier, vol. 59(C).
    11. A. W. Ahmad Fauzi & A. R. Husniyah & S. Mohamad Fazli & O. Mohamad Amim, 2017. "Financial Risk Tolerance as a Predictor for Malaysian Employees’ Gold Investment Behavior," Eurasian Studies in Business and Economics, in: Mehmet Huseyin Bilgin & Hakan Danis & Ender Demir & Ugur Can (ed.), Regional Studies on Economic Growth, Financial Economics and Management, pages 63-76, Springer.
    12. Saeed Ahmad Sabir & Hisham Bin Mohammad & Hanita Binti Kadir Shahar, 2019. "The Role of Overconfidence and Past Investment Experience in Herding Behaviour with a Moderating Effect of Financial Literacy: Evidence from Pakistan Stock Exchange," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 9(4), pages 480-490.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ma. Janice J. Gumasing & Renée Hannah A. Niro, 2023. "Antecedents of Real Estate Investment Intention among Filipino Millennials and Gen Z: An Extended Theory of Planned Behavior," Sustainability, MDPI, vol. 15(18), pages 1-35, September.
    2. Norhazimah Che Hassan & Aisyah Abdul-Rahman & Syajarul Imna Mohd Amin & Siti Ngayesah Ab Hamid, 2023. "Investment Intention and Decision Making: A Systematic Literature Review and Future Research Agenda," Sustainability, MDPI, vol. 15(5), pages 1-22, February.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Nur Alya Afiqah Binti Mahat & Wei-Theng Lau, 2023. "Financial Literacy, Experience, Risk Tolerance and Investment Behavior: Observations during Pandemic," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 7(10), pages 558-573, October.
    2. Waleed Mansi G Alshammari & Fahad Maiyah M Alshammari & Faiz Mayah M Alshammry, 2021. "Factors Influencing the Adoption of E-Health Management among Saudi Citizens with Moderating Role of E-Health Literacy," Information Management and Business Review, AMH International, vol. 13(3), pages 47-61.
    3. Azra Zaimovic & Anes Torlakovic & Almira Arnaut-Berilo & Tarik Zaimovic & Lejla Dedovic & Minela Nuhic Meskovic, 2023. "Mapping Financial Literacy: A Systematic Literature Review of Determinants and Recent Trends," Sustainability, MDPI, vol. 15(12), pages 1-30, June.
    4. Muhammad Waqas & Alishba Hania & Farzan Yahya & Iqra Malik, 2023. "Enhancing Cybersecurity: The Crucial Role of Self-Regulation, Information Processing, and Financial Knowledge in Combating Phishing Attacks," SAGE Open, , vol. 13(4), pages 21582440231, December.
    5. Isidore, Renu & Arun, C. Joe, 2023. "The Moderating Effect of Financial Literacy on the Relationship Between Decision-Making Tools and Equity Returns in the Indian Secondary Equity Market," Revista Finanzas y Politica Economica, Universidad Católica de Colombia, vol. 15(1), pages 185-211, January.
    6. Zhou, Yang & Yang, Manfang & Gan, Xu, 2023. "Education and financial literacy: Evidence from compulsory schooling law in China," The Quarterly Review of Economics and Finance, Elsevier, vol. 89(C), pages 335-346.
    7. Sanmugam Annamalah & Murali Raman & Govindan Marthandan & Aravindan Kalisri Logeswaran, 2019. "An Empirical Study on the Determinants of an Investor’s Decision in Unit Trust Investment," Economies, MDPI, vol. 7(3), pages 1-23, August.
    8. Hind Lebdaoui & Youssef Chetioui & Elias Guechi, 2021. "The Impact of Behavioral Biases on Investment Performance: Does Financial Literacy Matter?," International Journal of Economics and Financial Issues, Econjournals, vol. 11(3), pages 13-21.
    9. Maheshwari H & Anup K. Samantaray & Jyoti Ranjan Jena, 2023. "Unravelling Behavioural Biases in Individual and Institutional Investors Investment Decision- making: Intersection of Bibliometric and Systematic Literature Review," South Asian Journal of Business and Management Cases, , vol. 12(3), pages 275-299, December.
    10. , Aisdl, 2020. "Determinants of Stock Market Investors’ Behavior in COVID-19: A Study on the Pakistan Stock Exchange," OSF Preprints 4s9xe, Center for Open Science.
    11. Muskan Sachdeva & Ritu Lehal & Sanjay Gupta & Aashish Garg, 2021. "What make investors herd while investing in the Indian stock market? A hybrid approach," Review of Behavioral Finance, Emerald Group Publishing Limited, vol. 15(1), pages 19-37, September.
    12. Maria Andersson & Ola Eriksson & Chris Von Borgstede, 2012. "The Effects of Environmental Management Systems on Source Separation in the Work and Home Settings," Sustainability, MDPI, vol. 4(6), pages 1-17, June.
    13. Tran Huy Phuong & Thanh Trung Hieu, 2015. "Predictors of Entrepreneurial Intentions of Undergraduate Students in Vietnam: An Empirical Study," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 5(8), pages 46-55, August.
    14. Clara Cardone-Riportella & María José Casasola-Martinez & Isabel Feito-Ruiz, 2014. "Do Entrepreneurs Come From Venus Or Mars? Impact Of Postgraduate Studies: Gender And Family Business Background," Working Papers 14.04, Universidad Pablo de Olavide, Department of Financial Economics and Accounting (former Department of Business Administration), revised Sep 2014.
    15. Peng Cheng & Zhe Ouyang & Yang Liu, 0. "The effect of information overload on the intention of consumers to adopt electric vehicles," Transportation, Springer, vol. 0, pages 1-20.
    16. Ruijie Zhu & Guojing Zhao & Zehai Long & Yangjie Huang & Zhaoxin Huang, 2022. "Entrepreneurship or Employment? A Survey of College Students’ Sustainable Entrepreneurial Intentions," Sustainability, MDPI, vol. 14(9), pages 1-15, May.
    17. Alsalem, Amani & Fry, Marie-Louise & Thaichon, Park, 2020. "To donate or to waste it: Understanding posthumous organ donation attitude," Australasian marketing journal, Elsevier, vol. 28(3), pages 87-97.
    18. Pan, Jing Yu & Liu, Dahai, 2022. "Mask-wearing intentions on airplanes during COVID-19 – Application of theory of planned behavior model," Transport Policy, Elsevier, vol. 119(C), pages 32-44.
    19. Benoît Lécureux & Adrien Bonnet & Ouassim Manout & Jaâfar Berrada & Louafi Bouzouina, 2022. "Acceptance of Shared Autonomous Vehicles: A Literature Review of stated choice experiments," Working Papers hal-03814947, HAL.
    20. Jacqueline Ruth & Steffen Willwacher & Oliver Korn, 2022. "Acceptance of Digital Sports: A Study Showing the Rising Acceptance of Digital Health Activities Due to the SARS-CoV-19 Pandemic," IJERPH, MDPI, vol. 19(1), pages 1-16, January.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jmathe:v:9:y:2021:i:8:p:873-:d:536931. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.