Email this article 
Do Financial Literacy and Technology Affect Intention to Invest in the Capital Market in the Early Pandemic Period?
Abstract
Research aims: This paper discusses the effect of financial literacy and automatic investment technology on intention to invest in the capital market during the early pandemic.
Design/Methodology/Approach: The research population was students studying economics and finance in institutions located in Yogyakarta Special Region Province. The sample of 384 respondents was obtained through questionnaires distributed online. To test the impact of financial literacy and automatic investment technology on intention to participate in the capital market, multiple linear regression was used.
Research findings: The researchers found that financial literacy and automatic investment technology affected students’ intention to invest in the capital market. The number of students with a moderate level of financial literacy score dominated, followed by the students with low and high literacy scores. Besides, students’ background in economic and finance appeared inadequate to solely determine the financial literacy score.
Theoretical contribution/Originality: This paper contributes to the investment area, especially related to the automatic investment technology “Robo advisor,” that is still rarely studied yet, which will be a significant issue in the future. It also provides empirical results, which explain the investment intention through financial literacy. Moreover, this study was conducted during the massive growth of investors in Indonesia during the pandemic.
Practitioner/Policy implication: This study provides a useful reference to the financial sector, especially the capital market. Inclusive programs regarding financial literacy should be expanded for wider society to enhance their knowledge and dismiss lack of confidence in capital market participation. Private sectors providing automatic investment technology are suggested to continue developing a more convenient application to be accessible by a broader range of society.
Research limitation/Implication: The research included only students as the sample; hence, further research may use a larger area of the sample with various backgrounds and ages. Other determinants, such as norms, environment, risk, and more advanced financial literacy measurement, can also be added to enrich future studies and literature.
Keywords
Full Text:
PDFReferences
Abdeldayem, M. M. (2016). Is there a relationship between financial literacy and investment decisions in the Kingdom of Bahrain? Management and Administrative Sciences Review, 5(4), 203–221.
Ajzen, I. (1991). The theory of planned behavior. Organizational Behavior and Human Decision Processes, 50(2), 179–211. https://doi.org/10.1016/0749-5978(91)90020-t
Akhtar, F., & Das, N. (2019). Predictors of investment intention in Indian stock markets: Extending the theory of planned behaviour. International Journal of Bank Marketing, 37(1), 97–119. https://doi.org/10.1108/IJBM-08-2017-0167
Bareksa. (2021). Robo Advisor Indonesia. Retrieved from https://www.bareksa.com/robo-advisor
Bibit. (2018). Apa itu Robo Advisor. Retrieved from https://faq.bibit.id/id/article/apa-itu-robo-advisor-lop0vt/
Brenner, L., & Meyll, T. (2020). Robo-advisors: A substitute for human financial advice? Journal of Behavioral and Experimental Finance, 25, 100275. https://doi.org/10.1016/j.jbef.2020.100275
Bumcrot, C., Lin, J., & Lusardi, A. (2013). The Geography of Financial Literacy. Numeracy, 6(2). https://doi.org/10.5038/1936-4660.6.2.2
Chieffe, N., & Rakes, G. K. (1999). An integrated model for financial planning. Financial Services Review, 8(4), 261-268. Retrieved from http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.322.1161&rep=rep1&type=pdf
Cuong, P. K., & Jian, Z. (2014). Factors Influencing Individual Investors’ Behavior: An Empirical Study of the Vietnamese Stock Market. American Journal of Business and Management, 3(2). https://doi.org/10.11634/216796061403527
D’Hondt, C., De Winne, R., Ghysels, E., & Raymond, S. (2020). Artificial Intelligence Alter Egos: Who might benefit from robo-investing? Journal of Empirical Finance, 59, 278–299. https://doi.org/10.1016/j.jempfin.2020.10.002
Das, K. K., & Ali, S. (2020). The role of digital technologies on growth of mutual funds industry. International Journal of Research in Business and Social Science (2147- 4478), 9(2), 171–176. https://doi.org/10.20525/ijrbs.v9i2.635
East, R. (1993). Investment decisions and the theory of planned behaviour. Journal of Economic Psychology, 14(2), 337–375. https://doi.org/10.1016/0167-4870(93)90006-7
Financial Service Authority. (2013). Developing Indonesian Financial Literacy Index. Retrieved from http://www.definit.asia/PDF/xdow.php?file=Developing_Indonesian_Financial_Literacy_Index_2013.pdf
Financial Service Authority. (2017). Survei Nasional Literasi dan Inklusi Keuangan 2016. Retrieved from https://www.ojk.go.id/id/berita-dan-kegiatan/siaran-pers/Documents/Pages/Siaran-Pers-OJK-Indeks-Literasi-dan-Inklusi-Keuangan-Meningkat/17.01.23%20Tayangan%20%20Presscon%20%20nett.compressed.pdf
Financial Service Authority. (2021). Penyelenggara IKD dengan Status Tercatat di OJK. Retrieved from https://www.ojk.go.id/id/berita-dan-kegiatan/publikasi/Pages/Penyelenggara-IKD-dengan-Status-Tercatat-di-OJK-per-Juni-2021.aspx
Fitria, Y., Rahadi, R. A., Afgani, K. F., R. Putranto, N. A., Murtaqi, I., & Faturohman, T. (2019). The Influence of Demographic, Financial Literacy and Information Factors on Investment Decision Among Millenial Generations in Bandung. European Journal of Business and Management Research, 4(6), 1-7. https://doi.org/10.24018/ejbmr.2019.4.6.152
Gomber, P., Koch, J.-A., & Siering, M. (2017). Digital Finance and FinTech: current research and future research directions. Journal of Business Economics, 87(5), 537–580. https://doi.org/10.1007/s11573-017-0852-x
Hassan Al‐Tamimi, H. A., & Anood Bin Kalli, A. (2009). Financial literacy and investment decisions of UAE investors. The Journal of Risk Finance, 10(5), 500–516. https://doi.org/10.1108/15265940911001402
Huston, S. J. (2010). Measuring Financial Literacy. Journal of Consumer Affairs, 44(2), 296–316. https://doi.org/10.1111/j.1745-6606.2010.01170.x
Iannotta, G., Nocera, G., & Sironi, A. (2007). Ownership structure, risk and performance in the European banking industry. Journal of Banking & Finance, 31(7), 2127–2149. https://doi.org/10.1016/j.jbankfin.2006.07.013
IDXChannel. (2019). Meningkat 53,04 Persen, 2,4 Juta Investor Didominasi Kelompok Millenial. Retrieved from https://www.idxchannel.com/market-news/meningkat-5304-persen-24-juta-investor-didominasi-kelompok-millenial
Indonesia Stock Exchange. (2018). 2018 Annual Report. Retrieved from https://idx.co.id/en-us/listed-companies/financial-statements-annual-report/
KSEI. (2020). Digital Innovation to Maintain Growth amidst Challenges. Retrieved from https://www.ksei.co.id/files/uploads/annual_reports/report_file/id-id/18_laporan_tahunan_2020_20210713155600.pdf
KSEI. (2020). Peran Strategis KSEI dalam Meningkatkan Stabilitas Pasar Modal. Retrieved from https://www.ksei.co.id/files/uploads/fokuss_bulletins/fokuss_file/id-id/63_edisi_3_20201111140608.pdf
Lusardi, A. (2019). Financial literacy and the need for financial education: evidence and implications. Swiss Journal of Economics and Statistics, 155(1), 1–8. https://doi.org/10.1186/s41937-019-0027-5
Lusardi, A., & Mitchell, O. S. (2007). Financial Literacy and Retirement Preparedness: Evidence and Implications for Financial Education. Business Economics, 42(1), 35–44. https://doi.org/10.2145/20070104
Lusardi, A., & Mitchell, O. S. (2008). Planning and Financial Literacy: How Do Women Fare? American Economic Review, 98(2), 413–417. https://doi.org/10.1257/aer.98.2.413
Lusardi, A., & Mitchell, O. S. (2014). The Economic Importance of Financial Literacy: Theory and Evidence. Journal of Economic Literature, 52(1), 5–44. https://doi.org/10.1257/jel.52.1.5
Lusardi, A., & Wallace, D. (2013). Financial Literacy and Quantitative Reasoning in the High School and College Classroom. Numeracy, 6(2). https://doi.org/10.5038/1936-4660.6.2.1
Lusardi, A., Mitchell, O. S., & Curto, V. (2010). Financial literacy among the young. Journal of Consumer Affairs, 44(2), 358–380. https://doi.org/10.1111/j.1745-6606.2010.01173.x
Madden, T. J., Ellen, P. S., & Ajzen, I. (1992). A Comparison of the Theory of Planned Behavior and the Theory of Reasoned Action. Personality and Social Psychology Bulletin, 18(1), 3–9. https://doi.org/10.1177/0146167292181001
Mishra, R. (2018). Financial Literacy, Risk Tolerance and Stock Market Participation. Asian Economic and Financial Review, 8(12), 1457–1471. https://doi.org/10.18488/journal.aefr.2018.812.1457.1471
Mouna, A., & Anis, J. (2017). Financial literacy in Tunisia: Its determinants and its implications on investment behavior. Research in International Business and Finance, 39, 568–577. https://doi.org/10.1016/j.ribaf.2016.09.018
Nguyen, T. K. T., & Nguyen, K. M. (2020). Role of Financial Literacy and Peer Effect in Promotion of Financial Market Participation: Empirical Evidence in Vietnam. The Journal of Asian Finance, Economics and Business, 7(6), 1–8. https://doi.org/10.13106/jafeb.2020.vol7.no6.001
Putra, I. P. S., Ananingtiyas, H., Sari, D. R., Dewi, A. S., & Silvy, M. (2016). Pengaruh tingkat literasi keuangan, experienced regret, dan risk tolerance pada pemilihan jenis investasi. Journal of Business & Banking, 5(2), 271-282. https://doi.org/10.14414/jbb.v5i2.707
Sekaran, U., & Bougie, R. (2016). Research Methods for Business (7th ed.). John Wiley & Sons.
Sivaramakrishnan, S., Srivastava, M., & Rastogi, A. (2017). Attitudinal factors, financial literacy, and stock market participation. International Journal of Bank Marketing, 35(5), 818-841. https://doi.org/10.1108/IJBM-01-2016-0012
Statista. (2021). Robo-Advisors. Retrieved from https://www.statista.com/outlook/dmo/fintech/digital-investment/robo-advisors/worldwide?currency=usd#market-revenue
Tandio, T., & Widanaputra, A. (2016). Pengaruh pelatihan pasar modal, return, persepsi risiko, gender, dan kemajuan teknologi pada minat investasi mahasiswa. E-Jurnal Akuntansi, 16(3), 2316-2341. Retrieved from https://ojs.unud.ac.id/index.php/Akuntansi/article/view/21199
Van Rooij, M., Lusardi, A., & Alessie, R. (2011). Financial literacy and stock market participation. Journal of Financial Economics, 101(2), 449–472. https://doi.org/10.1016/j.jfineco.2011.03.006
Venkatesh, V., Thong, J. Y. L., & Xu, X. (2012). Consumer Acceptance and Use of Information Technology: Extending the Unified Theory of Acceptance and Use of Technology. MIS Quarterly, 36(1), 157–178. https://doi.org/10.2307/41410412
Yusuf, M. (2019). Pengaruh Kemajuan Teknologi dan Pengetahuan terhadap Minat Generasi Milenial dalam Berinvestasi di Pasar Modal. Jurnal Dinamika Manajemen dan Bisnis, 2(2), 86–94. https://doi.org/10.21009/jdmb.02.2.3
DOI: https://doi.org/10.18196/jai.v23i1.12517
Refbacks
- There are currently no refbacks.
Office:
Ruang Jurnal Fakultas Ekonomi dan Bisnis UMY
Gedung Ki Bagus Hadikusuma (E4) Lantai 2, Kampus Terpadu Universitas Muhammadiyah Yogyakarta,
Jalan Brawijaya (Lingkar Selatan), Tamantirto, Kasihan, Bantul, Daerah Istimewa Yogyakarta, Indonesia, 55183
Website: journal.umy.ac.id/index.php/ai - E-mail: jai@umy.ac.id
Journal of Accounting and Investment is licensed under Creative Commons Attribution Attribution-NonCommercial-NoDerivatives 4.0 International License
View My Stats