Impact of Financial Literacy on Investment Decisions: The Mediating Effect of Big-Five Personality Traits Model
Abstract
The study examines the impact of financial literacy on investment decisions with the mediating effect of personality traits based on the big-five model. A total of 235 responses from Karachi were collected using the convenience sampling technique. The five-point Likert scale questionnaire was used alongside the Smart-PLS software for data analysis. The results suggest that financial literacy did not have a significant effect on investment decisions through agreeableness, conscientiousness and extraversion. However, financial literacy has a significant negative impact on investment decisions through openness toexperience and a significant positive impact through neuroticism. The study helps improve our understanding of investor behavior by considering the mediating role of big five personality traits on the relationship between financial literacy and investment decisions. It is recommended that financial institutions should provide investment counseling services to prospective investors using the consumer profile technique.Keywords: Financial literacy, big-five model, investment decisions, PLS-SEM, Pakistan.References
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