The effect of behavioral bias moderated by financial literacy, cognitive ability, and self-efficiency on stock investment decisions in youth generations
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Oct 20, 2023
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Abstract
Employees in the Padang Sumatra V River Basin Office are under the Ministry of Public Works and Public Housing, where the majority of employees are young people who decide to invest in stocks as a guide and provision for their life which is obtained from capital gains and dividends that can be used for the future if the employment relationship is later abolished. and contracts that cannot be extended due to political affairs. Based on this, this study aims to analyze the effect of behavioral bias, cognitive ability, and self-efficacy on stock investment decisions with financial literacy as a moderator. Data comes from 137 younger generation employees who are collected through online structured questionnaires (Google Forms). Structured equation modeling with a partial least squares approach is adopted for data analysis. The results of the study show that behavioral bias and cognitive ability have a significant effect on stock investment decisions compared to self-efficacy not being a predictor of stock investment decisions and financial literacy does not weaken the relationship between behavioral bias and irrational stock investment decision making
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How to Cite
Tristiyono, D., Husni, T., & Adrianto, F. (2023). The effect of behavioral bias moderated by financial literacy, cognitive ability, and self-efficiency on stock investment decisions in youth generations. Enrichment : Journal of Management, 13(4), 2386-2395. https://doi.org/10.35335/enrichment.v13i4.1600
References
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Firdhausa, F., & Apriani, R. (2021). Pengaruh Platform Media Sosial Terhadap Minat Generasi Milenial Dalam Berinvestasi Di Pasar Modal. Supremasi Hukum, 17(02), 96–103.
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Qamar, M. A. J., Khemta, M. A. N., & Jamil, H. (2016). How knowledge and financial self-efficacy moderate the relationship between money attitudes and personal financial management behavior. European Online Journal of Natural and Social Sciences, 5(2), 296.
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Rasheed, M. H., Rafique, A., Zahid, T., & Akhtar, M. W. (2018). Factors influencing investor’s decision making in Pakistan: Moderating the role of locus of control. Review of Behavioral Finance, 10(1), 70–87.
Rasool, N., & Ullah, S. (2020). Financial literacy and behavioural biases of individual investors: empirical evidence of Pakistan stock exchange. Journal of Economics, Finance and Administrative Science, 25(50), 261–278.
Rizkiawati, N. L., & Asandimitra, N. (2018). Pengaruh demografi, financial knowledge, financial attitude, locus of control dan financial self-efficacy terhadap financial management behavior masyarakat surabaya. Jurnal Ilmu Manajemen (JIM), 6(3), 2.
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Tauni, M. Z., Rao, Z.-R., Fang, H., Mirza, S. S., Memon, Z. A., & Jebran, K. (2017). Do investor’s big five personality traits influence the association between information acquisition and stock trading behavior? China Finance Review International, 7(4), 450–477.
Widjaja, S. S., & Sembel, I. H. M. R. (2020). The Effect Of Investor Personality Traits On Investment Intention Of Indonesia Digital Startup With Mediating Role Of Financial Self-Efficacy. South East Asia Journal of Contemporary Business, Economics and Law, 22(1).
Yushita, A. N. (2017). Pentingnya literasi keuangan bagi pengelolaan keuangan pribadi. Nominal: Barometer Riset Akuntansi Dan Manajemen, 6(1), 11–26.
Zahl-Thanem, A., Burton, R. J. F., & Vik, J. (2021). Should we use email for farm surveys? A comparative study of email and postal survey response rate and non-response bias. Journal of Rural Studies, 87, 352–360.
Altaf, H., & Jan, A. (2023). Generational theory of behavioral biases in investment behavior. Borsa Istanbul Review.
Ameen, S., & Praharaj, S. K. (2020). Problems in using WhatsApp groups for survey research. Indian Journal of Psychiatry, 62(3), 327–328.
Anggiani, I., Tasha, N., & Munawaroh, R. (2021). Analisis Perilaku Investor Pemula Dalam Pengambilan Keputusan Investasi Saham Di Masa Pandemi Covid-19. Jurnal Pendidikan Tambusai, 5(3), 114476–114486.
Atmaja, D. W., & Widoatmodjo, S. (2021). Pengaruh Motivasi, Persepsi Risiko Dan Pengetahuan Investasi Terhadap Minat Berinvestasi Di Masa Pandemi COVID-19. Jurnal Manajerial Dan Kewirausahaan, 3(3), 641–648.
Behera, Y. D. P., Nanda, S. S., Sharma, S., & Sahoo, T. R. (2022). Examining Risk Absorption Capacity as a Mediating Factor in the Relationship between Cognition and Neuroplasticity in Investors in Investment Decision Making. International Journal of Financial Studies, 10(1), 21.
Bougie, R., & Sekaran, U. (2019). Research methods for business: A skill building approach. John Wiley & Sons.
Bucher-Koenen, T., & Ziegelmeyer, M. (2011). Who lost the most? Financial literacy, cognitive abilities, and the financial crisis.
Firdhausa, F., & Apriani, R. (2021). Pengaruh Platform Media Sosial Terhadap Minat Generasi Milenial Dalam Berinvestasi Di Pasar Modal. Supremasi Hukum, 17(02), 96–103.
Hair, J. F., Ringle, C. M., Gudergan, S. P., Fischer, A., Nitzl, C., & Menictas, C. (2019). Partial least squares structural equation modeling-based discrete choice modeling: an illustration in modeling retailer choice. Business Research, 12, 115–142.
Hariono, M. W., Cahyadi, R. T., & Wijayanti, D. (2023). Pengaruh Bias Perilaku terhadap Pengambilan Keputusan Irasional dengan Financial Literacy sebagai Pemoderasi. Jurnal Samudra Ekonomi Dan Bisnis, 14(1), 1–14.
Henseler, J., Ringle, C. M., & Sarstedt, M. (2015). A new criterion for assessing discriminant validity in variance-based structural equation modeling. Journal of the Academy of Marketing Science, 43(1), 115–135.
Hildebrandus, H., Hady, H., & Nalurita, F. (2023). The Influence of Financial Literacy as a Mediation of the Relationship Between Behavioral Bias and Decisions in Investing Employees in Jabodetabek. Journal of Social Research, 2(5), 1643–1654.
Hossain, T., & Siddiqua, P. (2022). Exploring the influence of behavioral aspects on stock investment decision-making: a study on Bangladeshi individual investors. PSU Research Review, ahead-of-print.
Jain, J., Walia, N., & Gupta, S. (2020). Evaluation of behavioral biases affecting investment decision making of individual equity investors by fuzzy analytic hierarchy process. Review of Behavioral Finance, 12(3), 297–314.
Kaur, M., & Vohra, T. (2012). Understanding individual investor’s behavior: a review of empirical evidences. Pacific Business Review International, 5(6), 10–18.
Khan, S. N. (2017). Financial Risk Tolerance: An Analysis of Investor’s Cognitive, Decision-Making Styles and Cultural Effects. Journal of Finance, Accounting and Management, 8(1), 20.
Lin, H.-W. (2011). Elucidating rational investment decisions and behavioral biases: Evidence from the Taiwanese stock market. African Journal of Business Management, 5(5), 1630.
Mayasari, M., & Sijabat, Z. M. (2017). Pengaruh Financial Self-Efficacy terhadap Perilaku Manajemen Keuangan Individu. Journal of Applied Managerial Accounting, 1(2), 50.
Nofsinger, J. R. (2022). The psychology of investing. Taylor & Francis.
Noor, N., Batool, I., & Arshad, H. M. (2020). Financial literacy, financial self-efficacy and financial account ownership behavior in Pakistan. Cogent Economics & Finance, 8(1), 1806479.
Özen, E., & Ersoy, G. (2019). The impact of financial literacy on cognitive biases of individual investors. In Contemporary Issues in Behavioral Finance (Vol. 101, pp. 77–95). Emerald Publishing Limited.
Parveen, S., Satti, Z. W., Subhan, Q. A., Riaz, N., Baber, S. F., & Bashir, T. (2021). Examining investors’ sentiments, behavioral biases and investment decisions during COVID-19 in the emerging stock market: a case of Pakistan stock market. Journal of Economic and Administrative Sciences.
Qamar, M. A. J., Khemta, M. A. N., & Jamil, H. (2016). How knowledge and financial self-efficacy moderate the relationship between money attitudes and personal financial management behavior. European Online Journal of Natural and Social Sciences, 5(2), 296.
Rahman, M., & Gan, S. S. (2020). Generation Y investment decision: an analysis using behavioural factors. Managerial Finance.
Ranaweera, S. S., & Kawshala, B. A. H. (2022). Influence of behavioral biases on investment decision making with moderating role of financial literacy and risk attitude: A study based on colombo stock exchange. Journal Homepage: Https://Sajf. Sljol. Info, 2(1), 56–67.
Rasheed, M. H., Rafique, A., Zahid, T., & Akhtar, M. W. (2018). Factors influencing investor’s decision making in Pakistan: Moderating the role of locus of control. Review of Behavioral Finance, 10(1), 70–87.
Rasool, N., & Ullah, S. (2020). Financial literacy and behavioural biases of individual investors: empirical evidence of Pakistan stock exchange. Journal of Economics, Finance and Administrative Science, 25(50), 261–278.
Rizkiawati, N. L., & Asandimitra, N. (2018). Pengaruh demografi, financial knowledge, financial attitude, locus of control dan financial self-efficacy terhadap financial management behavior masyarakat surabaya. Jurnal Ilmu Manajemen (JIM), 6(3), 2.
Tandelilin, E. (2010). Dasar-dasar manajemen investasi. Manajemen Investasi, 34.
Tauni, M. Z., Rao, Z.-R., Fang, H., Mirza, S. S., Memon, Z. A., & Jebran, K. (2017). Do investor’s big five personality traits influence the association between information acquisition and stock trading behavior? China Finance Review International, 7(4), 450–477.
Widjaja, S. S., & Sembel, I. H. M. R. (2020). The Effect Of Investor Personality Traits On Investment Intention Of Indonesia Digital Startup With Mediating Role Of Financial Self-Efficacy. South East Asia Journal of Contemporary Business, Economics and Law, 22(1).
Yushita, A. N. (2017). Pentingnya literasi keuangan bagi pengelolaan keuangan pribadi. Nominal: Barometer Riset Akuntansi Dan Manajemen, 6(1), 11–26.
Zahl-Thanem, A., Burton, R. J. F., & Vik, J. (2021). Should we use email for farm surveys? A comparative study of email and postal survey response rate and non-response bias. Journal of Rural Studies, 87, 352–360.