Building Blocks of Investment Intention: A Study to Explain Nexus Among Financial Literacy, Intention to Invest and Demographics

Aafia Yousuf; Asif Hussain Samo; Shahid Obaid; Quratulain Nazeer

doi:10.58921/jobams.3.1.41

Aafia Yousuf Department of Business Administration, Iqra University, Karachi
Asif Hussain Samo Department of Business Administration, Sindh Madressatul Islam University, Karachi
Shahid Obaid Department of Business Administration, Sindh Madressatul Islam University, Karachi
Quratulain Nazeer Department of Business Administration, Sindh Madressatul Islam University, Karachi

DOI: https://doi.org/10.58921/jobams.3.1.41

Keywords: Financial literacy, Intention to Invest, Emerging Markets

Abstract

The purpose of this study is to assess and explore intention to invest and financial literacy with respect to gender, age, university, and degree level. In addition, it examines the moderating impact of demographic variables on intention to invest. With positivist philosophy, this study employed quantitative approach and the data was gathered through questionnaire with adopted instrument. Data was collected from potential young investors with sample size of 294 and it was analyzed with mean variance techniques. The results indicate that the financial literacy of Pakistan’s and specifically Karachi’s students is less than the average level. Students from private university hold higher financial literacy than the students of public sector. It also differs with age and degree program; however, level of financial literacy exits regardless of gender of the respondents. No significant difference is found in the intention of students to invest based on their gender, age and university. However, it differs based on what degree they possess. Finally, no moderating impact of demographic variables is found on the intention to invest. The study is confined in local context and only young population of Pakistan is focused. The results suggest that financial literacy of the students is far away from needed level. However, they all are more motivated towards investments. Emerging markets rely on investments of commoners as major chunk of Pakistan’s population is youth, its economy needs them to develop investment tendencies. This study initiates scientific endeavor to explore and facilitate young investors. The results can help the higher education authorities and government to take necessary initiatives to improve the financial literacy of youngsters and introduce schemes for students to initiate investments. This study catered the need to investigate financial literacy and intention to invest in Pakistan. It will pave way for further such studies to dig out the dimensions and explain tendencies of potential young investors.