FROM FINANCIAL LITERACY TO INVESTMENT ACTION: THE MEDIATING ROLE OF INVESTMENT ATTITUDE AND THE MODERATING ROLE OF RISK PERCEPTION IN EMERGING FINANCIAL MARKETS

Abstract

Financial literacy is often believed to foster positive investment attitudes and constructive decisions. This theory is challenged, however, by the notion that investment app-making experience and the influence of risk perception which is a moderator to the outcome relationship, by which investment behavior is exhibited. Within the context of shadow (emerging) markets like Pakistan, data is analyzed for investment behavior and attitudes (IBA) and investment literacy (IL) using to justify, in part, the planned behavior theory. Insight is garnered via Partial Least Squares Structural Equation Modeling (PLS-SEM). IA is ‘Investment Attitude’, while ID is ‘Investment Decisions’.

Our results indicated that the level of I have directly proportional relationship FA have positive correlation with IA and ID. Similarly, IA has positive correlation with IC, to a point. Moreover, the blueprint structurally captures investment ID and IL inter-act which reflects attitude change, which in turn defers the issue of behavior to a partially expressed opaque states.

RPs lowers the assumption that there is a positive correlation between attitude toward the perceived risk and investment IA and ID. In other words, weaker positive attitude investment earns attitude participation.

You have done remarkable good investment awareness based on the investment literacy and investment attitude behavioral relationships. What also matters is the ability to help investors think rationally.

This research added new dimensions to behavioral finance by melding cognitive, emotional, and perceptual analysis and serves to enhance the knowledge and trust of investors even more in emerging markets.