Determinants of Investment Intention: Evidence from Investors in Indonesia Capital Market Using a TPB Framework

Abstract

Background: Investment intentions are often influenced by personality traits or a person's way of acting when deciding something. Personality traits are a person's way of acting which is shown or applied in an attitude, character, belief, and so on. The small ratio of the number of investors to the population in Indonesia raises the question of what motivates the entry of new investors in the Indonesian capital market. Aims: This research is conducted by testing and analyzing the variables of financial attitude, subjective norms, financial self-efficacy, and financial knowledge on investment intention. Study Design: This research type is comparative causal research. The population was all investors in Surabaya City. Place and Duration of Study: The sampling technique used was accidental sampling. The analysis technique used is structural equation modeling (SEM) with Amos 24 software. Methodology: These tests and analyzes are carried out directly and indirectly or through mediated relationships through financial attitude and financial self-efficacy. The sample size for analysis using Structural equation modeling (SEM) which uses the Maximum Likelihood Estimation (MLE) model is 100 – 200 samples. The researcher's sample size was determined as 135 respondents and has entered the size range that can be used in SEM analysis. SEM evaluation is used to test model fit which can be assessed based on testing various fit indices obtained from AMOS based on evaluating the fulfillment of SEM assumptions, namely normality assumptions, outlier assumptions, and multicollinearity and singularity assumptions. Results: The conclusion is that financial attitude has a positive and significant effect on investment intentions. Subjective norms have a positive and insignificant effect on investment intentions in the capital market. Financial self-efficacy has a positive and insignificant effect on investment intentions in the capital market. Financial knowledge has a positive and significant effect on investment intentions in the capital market. Financial knowledge has a positive and significant effect on financial attitude in the capital market. Personality traits have a positive and insignificant effect on investment intentions in the capital market. Personality traits have a positive and significant effect on financial self-efficacy. Financial knowledge on investment intention mediated by financial attitude has a significant relationship. Personality traits on investment intention mediated by financial self-efficacy are not significant. Conclusion: The contributions of this research are expected to facilitate further understanding of the factors that influence investment intentions, especially in Surabaya, and enrich the financial behavior literature with adjustments and additional variables in the Theory of Planned Behavior (TPB) framework.