Determinants of Investment Awareness: A Moderating Structural Equation Modeling-Based Model in the Saudi Arabian Context

Abstract

In line with today’s economy, investment and financial awareness are necessary for success and an individual’s well-being, specifically for the younger generations. Therefore, this study aims to examine the relationships between financial literacy, saving behavior, a lack of self-control, family financial socialization, and investment awareness. Further, it investigates the moderating role of both family financial socialization and the lack of self-control in these relationships. Employing a quantitative study technique and partial least squares structural equation modeling (PLS-SEM), we analyzed a sample of 409 students representing young adults at King Faisal University, specifically in the School of Business. Our results indicate that financial literacy, saving behavior, and family financial socialization are significantly and positively related to investment awareness. Interestingly and as expected, a lack of self-control negatively and significantly affects investment awareness. For the moderating impact, it was found that the connection between financial literacy, saving behavior, and investment awareness is positively and strongly moderated by family financial socialization. Likewise, a lack of self-control significantly and negatively moderated the association between financial literacy, saving behavior, and investment awareness. The results of this study provide substantial implications for regulators, educational organizations, individuals, and their families.

Antecedents of Risky Financial Investment Intention among Higher Education Students: A Mediating Moderating Model Using Structural Equation Modeling

“…When a family member, such as parents, has investment information and shares it with other family members, this motivates nonparticipant relatives to join in the investments [42]. Social impact may be one of the actions that shape saving behaviors as a result of investment awareness [12]. In the context of Saudi Arabia, the 2030 Saudi Vision has promoted investment awareness among Saudi people through the Capital Market Authority (CMA).…”

“…Moreover, it helps students become aware of career alternatives and choices. Policymakers in Saudi Arabia have realized the importance of education support at the university level and its impact on student intention; therefore, they have added some investment courses to the existing curricula [12]. Keat et al [60] and Aliedan et al [61] confirmed that university education support positively impacts the entrepreneurial intentions of higher education students.…”

“…In this sense, Hastings and Mitchell [11] argued that investment awareness varies according to the age of individuals. Investment and financial awareness are two critical variables for the financial market's long-term growth [12]. Therefore, communities with a high degree of financial knowledge are more likely to contain individuals who are skilled at making good investment decisions [13].…”

“…In the context of Saudi Arabia, investment awareness and education support have received great attention after the inauguration of the Saudi Vision 2030. Despite initiatives by the Saudi government, there is still a lack of financial awareness and knowledge among young adults [12]. However, Sedais and Al Shahab [22] argued that Saudi young people (under 37 years old) have poor financial understanding.…”

“…Agarwalla et al [25] argued that family business engagement increases children's awareness of their own financial fundamentals. Certainly, adults and children gain financial abilities in their families through multiple socialization practices, such as observing their parents' financial behavior [12]. Social influence, such as family, peers and university professors, may shape an individual's behaviors and principles; hence, it affects the individual's decisions [26].…”