Combinational Effects of Financial Literacy, Risk Tolerance and Risk Perception on Individual Investment Decision-making for Online Financial Market

Abstract

Abstract:

Based on the data of 348 consumers, we study the combinational effects of financial literacy, risk tolerance and risk perception on individual investment decision-making of online financial market using structural equation modeling. The results are as follows:(1) Investment intention gets higher when the level of consumers' financial literacy becomes higher, or when the level of consumers' risk perception becomes lower. (2) The combinational effects show up as a chain:financial literacy→risk tolerance→risk perception→ decision-making. In this path, financial risk tolerance exerts a completely mediating effect on the relationship between financial literacy and risk perception; risk perception also exerts a completely mediating effects on the relationship between financial risk tolerance and in-vestment decision-making. (3)The direct effect of financial literacy on decision-making is bigger than the indirect effect, which indicates that an improvement of financial literacy can bring an obvious promotion for decision-making directly. Then, we can conclude that consumer's financial literacy is an important antecedent for investment decision-making. We should understand consumers' financial literacy firstly before promoting their on-line financial investment decisions.

Key words: financial literacy, financial risk tolerance, risk perception, decision-making

Wei Liping, Chen Demian, Xie Shengqiang. Combinational Effects of Financial Literacy, Risk Tolerance and Risk Perception on Individual Investment Decision-making for Online Financial Market[J]. , 2018, 30(9): 61-71.

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