Financial Literacy, Risk Perception and Investment Intention Among Youth in Pakistan
Author(s)
Muhammad Nauman Sadiq , Raja Ased Azad khan ,
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Abstract
The purpose of this study was to examine the financial literacy, risk perception and investment intention among youth in Pakistan.Using quantitative approach, a sample of 310 business students and teachers were drawn from different universities located in Rawalpindi and Islamabad. The study used the four steps approach proposed by Baron and Kenny (1986) where several regression analyses were conducted and significant of the coefficients is examined at each step. These steps were processed using Statistical package SPSS. Analysis of the data reveals that most of the respondents have adequate basic and advance financial literacy. The further study disclosed financial literacy has a significant positive impact on individual’s intention for short-term and long-term investment. Further, Study disclosed that risk perception does not act as a mediator between financial literacy and investment intention (short-term investment and long-term investment). The present study has implications for financial managers, financial advisors, and government and for individuals to comprehend the role of financial literacy and risk perception on the intention of individuals toward investment. The relationship of financial literacy of individual investors with their investment decisions is widely studied in the literature. But no significant study is observed which explore the relationship between financial literacy, risk perception and investment intention among Youth in Pakistan. Present study fills the gap in the literature with the perspective of Pakistan.
Keywords
Financial literacy, Risk perception, Investment intention
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