Interplay Between Financial Literacy, Firm’s Characteristics, Behavioural Biases and Investment Choices—A Conditional Mediation Model

Abstract

Individual investing decisions are crucial in determining one’s financial well-being, as these choices directly affect their financial health. The current study uses structured equation modelling based on survey data from 288 individual investors. We contribute to the growing body of literature by employing the conditional mediation model to investigate the interaction between financial literacy, firm characteristics, behavioural biases and their impact on investment choices. The study findings substantiate the critical role of a firm’s characteristics in mediating the relationship between financial literacy and investment choices. The findings highlight the importance of financial literacy in enabling investors to make informed decisions, accentuating the mediating role of a firm’s characteristics, which adds novelty to the study.