Proceedings of the 1st International Conference on Sustainable Management and Innovation, ICoSMI 2020, 14-16 September 2020, Bogor, West Java, Indonesia

Research Article

Analysis of Capital Market Literacy, Risk Preferences, and Financial Behavior on The Probability of Investment Decisions in The Stock Market

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  • @INPROCEEDINGS{10.4108/eai.14-9-2020.2304467,
        author={Nivi  Hendwiyani and Maria  Ulpah},
        title={Analysis of Capital Market Literacy, Risk Preferences, and Financial Behavior on The Probability of Investment Decisions in The Stock Market},
        proceedings={Proceedings of the 1st International Conference on Sustainable Management and Innovation, ICoSMI 2020, 14-16 September 2020, Bogor, West Java, Indonesia},
        publisher={EAI},
        proceedings_a={ICOSMI},
        year={2021},
        month={5},
        keywords={capital market literacy financial behavior investment decisions risk preferences},
        doi={10.4108/eai.14-9-2020.2304467}
    }
    
  • Nivi Hendwiyani
    Maria Ulpah
    Year: 2021
    Analysis of Capital Market Literacy, Risk Preferences, and Financial Behavior on The Probability of Investment Decisions in The Stock Market
    ICOSMI
    EAI
    DOI: 10.4108/eai.14-9-2020.2304467
Nivi Hendwiyani1,*, Maria Ulpah1
  • 1: University of Indonesia
*Contact email: nivi.hendwiyani@gmail.com

Abstract

This research was conducted to analyze capital market literacy, risk preferences, and financial behavior towards the probability of investment decisions in the stock market. The research model uses a questionnaire as a research instrument with a sample of Indonesian citizens living in Indonesia with a minimum age of 18 years. Furthermore, binary logistic regression is applied to find out whether capital market literacy, risk preferences, and financial behavior affect the probability of investors' investment decisions in the stock market. The results showed that capital market literacy and risk preferences significantly influenced the probability of investment decisions. This research is also analyzes whether gender affects capital market literacy and risk preferences. Crosstabulation test results showed that men tend to invest in shares and have higher level of capital market literacy and risk preferences compared to women.