Determinants of mobile apps adoption by retail investors for online trading in emerging financial markets

Abstract

PurposeThe purpose of this study is to investigate the influence of mobile applications on investment decisions by retail investors in stocks and mutual funds. This study focuses on how mobile technologies are applied on mobile apps by retail investors for e-trading in emerging financial markets.Design/methodology/approachThe study explored predictive relevance for the adoption behavior of retail investors under the Unified Theory of Acceptance and Use of Technology (UTAUT) framework. Further, goal contagion theory was applied to investigate the adoption behavior of investors towards e-trading. An adapted questionnaire was used to collect the date from April to June 2021 and data analysis was performed on 507 usable responses. The methodology adopted in this study is variance based partial least square structural equational modelling (PLS-SEM). Additionally, the study explains important and performing constructs based on the response of retail investors towards mobile app usage for investment decisions.FindingsThe study shows that effort expectancy, performance expectancy followed by perceived return were the primary determinants of behavioral intentions to use mobile applications by retail investors for e-trading. Further, habit of investors determined the adoption behavior of investors towards mobile apps. Additionally, the study revealed that perceived risk is not an important aspect for retail investors in comparison to perceived return.Research limitations/implicationsThe study in future can address to the aspect of personality traits of retail investors for technology adoption for investment decisions. Further investigation is required on addressing unobserved heterogeneity of retail investors towards technology adoption process in emerging financial markets.Practical implicationsThe study provides theoretical and practical implications for retail investors, financial advisors and technology companies to understand the behavioral pattern and mobile apps adoption behavior of retail investors in emerging financial market. The findings in the study will help broking firms to sensitize their clients for effective use of their respective mobile apps for e-trading purposes. The study will strengthen the knowledge of financial advisors to understand investment behavior of retail investors in emerging financial markets.Originality/valueThis study unfolds a novel framework of research to understand the technology adoption pattern of retail investors for e-trading by mobile applications in emerging financial markets. The present study provides significant understanding in the domain of technology adoption by retail investors under behavioral finance environment.

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“…The statistical test results show a p-value of 0.449 and a path coefficient value of -0.019, which indicates that H3 is rejected. These results contradict research from Nair et al (2023), which states that social influence significantly affects behavioral intention to use mobile applications. However, this result aligns with research by Oliveira et al (2014) and Thaker et al (2019), which state that social influence does not affect user behaviour intention in mobile banking adoption.…”

“…Based on research by Martins et al (2014) shows that PE, EE, and SI affect Behavioral Intention (BI). Other research from Nair et al (2023) states that only PE and EE are the main determinants of behavioral intention. Furthermore, research from Baptista & Oliveira (2015) found that EE, SI, and FC do not affect BI.…”

Determinants of Intention to Use Islamic Fintech During Covid-19 Pandemic

“…An important point for existing clients in Indonesia is the ease of use which is achieved by making lossless applications possible. This finding was supported by Chan et al (2022) and Nair et al (2022) that found a positive influence on effort expectancy to usage intention. Same result from Lisana (2022) that stated the de-gree of effort-free experience by customers will lead to a greater inclination to adopt the platform.…”

Assessment of users' adoption behaviour for stock market investment through online applications

“…The investors' behaviour in adopting online applications for e-trading and other investment decisions is affected by various factors. Some main factors influencing investors' behaviour are effort expectations, performance expectations, and perceived returns [ 45 ]. The perceived return and perceived risk were measured as significant forecasts of investors' adoption behaviour in the financial market [ 46 , 47 ].…”

“…More significant revenue influences the stock market investors to invest in the financial market, and investors elect online platforms to generate and receive more revenue frequently [ 50 ]. Behaviour intention and facilitating conditions influence the adoption behaviour of investors through a mobile application for the online stock transaction and also found that future investors should consider these factors during mobile stock trading [ 45 ].…”