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Factors affecting investment intentions: A consumer behaviour perspective

Abstract

The purpose of this study is to examine investors’ decision-making from the perspective of a consumer using constructs commonly found in the consumer behaviour field. An investment intentions model incorporating product knowledge, product involvement, risk and uncertainty avoidance, and mediated by perceived risk and uncertainty, was developed and analysed using structural equation modelling. The research found that product knowledge and product involvement had the greatest impact on intentions, suggesting the applicability of these constructs in finance research. Perceived risk was the only mediating construct. The model explained more than 60 per cent of the variation in intentions. A major contribution of this research came from the development of an investment intentions model to examine retail investors’ investment decision-making processes from a consumer behaviour perspective. It helps practitioners to develop a better understanding of the factors that impact on their clients’ intentions to invest in the stock market. This study is the first to include a set of consumer behaviour constructs in an investment intentions model that was not examined before, despite the close relationship between behavioural finance and consumer behaviour that includes elements of psychology and sociology in individual decision-making.

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Correspondence to Kang Li Lim.

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2graduated in economics from the University of Western Australia (UWA) and undertook doctoral training at Cornell University. He was Director of the Graduate School of Management at UWA from 2000 until 2007. He has been a consultant to a large number of organisations in Australia and internationally and has published more than 150 research papers in journals and in book chapters, as well as a number of research monographs, across a wide range of management and marketing areas.

Appendix

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Table A1

Table A1 The constructs used in the study

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Lim, K., Soutar, G. & Lee, J. Factors affecting investment intentions: A consumer behaviour perspective. J Financ Serv Mark 18, 301–315 (2013). https://doi.org/10.1057/fsm.2013.23

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Keywords

  • investment intentions
  • consumer behaviour
  • perceived risk and uncertainty
  • risk and uncertainty avoidance
  • investment model