Investment intentions model of Pakistani inventors

This research aims to present a model of the investment decision-making process. In the review of extensive literature, it has been identified that individual investors have been
investigated from either behavioural finance or social psychological perspective but rarely from consumer behaviour perspective. To fill in the identified gaps, this research integrates behavioural finance, consumer behaviour and social psychological perspectives to provide a model to explain investors’ decision-making. This research also proposed the moderating effect of perceived risk on the relationship between behavioural finance factors, consumer behaviour factors, social psychological factors and investment intentions. This research is based on the theory of planned behaviour, social cognitive theory and prospect theory. The data was collected by using a survey questionnaire filled by employees who are working
at different organisations in Pakistan. The collected data was analysed using SmartPLS. After the preliminary tests and assumptions testing, 548 observations were found to be
useful. The measurement model assures the validity and reliability of the focal constructs. The hypothesis testing indicate that uncertainty avoidance, overconfidence, product
knowledge, product involvement, perceived behavioural control and subjective norm appear to have significant, while risk avoidance has insignificant influence on investment intentions. Perceived risk only moderates the relationship between perceived behavioural control and investment intentions. It is recommended that the stock exchange commission may offer some risk-adjusted investment options for individual investors and provide them with awareness to increase their control over investment in the stock market. In addition, friends, family and important people around can be used as sources to promote stock investment and to increase the level of investment intentions.