Impact of Financial Literacy on Investment Behavior with the Moderator Role of Personality Trait (Extrovert)

Abstract

Purpose: The purpose of this research study is to determine and check the impact of financial literacy on investment behavior with the help of moderator that is extrovert and it shows that the relationship among them is significant positive with the help of all the indicators of financial literacy. Design/Methodology/approach: Data is gathered by using structured close-ended questionnaire with the sample of 300 questionnaires that were collected back as 244 sample. The sampling technique used in this paper is non-probability sampling. Tests and models used in this study are correlation coefficient and regression analysis to check the relationship among them and also applied SEM. Validity and reliability of the study has been checked by CAC an9 other elements are checked with the help of AMOS 22 and SPSS 22. Findings: The findings of the study shows that financial behavior is positively related to the investment behavior and it has support the hypothesis we developed in this study regarding the criteria for financial literacy. A II of the other variables with the financial literacy have signitlcant positive impact on investment behavior with the moderating role of extrovert. Research implications: For the purpose for future research on this paper we recommend to take large sample size that will generate probably different results. Secondly if financial literacy is taken as independent variables and dependent variable is taken from any other field of finance instead of investment behavior it will generate productive results as per the test and models applied on it. Practical implications: Retail individual investor can utilize financial literacy and financial knowledge to improve his level of taking decision for the investment purpose. This study practically implies the results shown into this paper that benefits the retail investors of stock market of Pakistan. Significance of study: This will examine and educate people from different f"inancial sectors to improve their knowledge that leads to the financial decision making process. Moreover, it will help in academia for the students of finance area to educate themselves and be prepared to take the financial decisions based on basic levels as ill as professional levels. Industrialists will find it helpful to take decisions about their financial ill-being and to maximize the ratio profit. Originality/value: The study supports the idea of financial literacy that compose the relationship with investment behavior in order to strengthen the impact of financial literacy for the development of economic situation of Pakistan.