Analysis of Financial Literacy and Risk Tolerance on Student Decisions to Invest
Keywords:
university students, financial literacy, risk tolerance, investment decisionAbstract
Every individual, including students, needs wealth to fulfill all their needs. Therefore, they always try to acquire this wealth through investment decisions. In making investment decisions, there are factors that need to be considered, such as financial literacy and tolerance for risk. This study aims to examine the effect of financial literacy and tolerance for risk on the investment decisions of students in Surabaya City. This research uses quantitative methods and a random sampling method with a sample size of 120 respondents. The data used in this study is primary data obtained through a survey using a questionnaire. Data analysis was conducted using multiple linear regression to test the hypothesis regarding the effect of financial literacy and risk tolerance on investment decisions. Data analysis includes validity, reliability, classical assumptions, hypothesis testing, and the coefficient of determination. All analyses were conducted using SPSS version 26 software. Based on the results of the study, it is evident that the tests carried out on the variables studied showed significant results. This means that both individually and as a whole, financial literacy and tolerance for risk affect students' decisions to invest in Surabaya City.
References
Adamus, M. & M. Grezo. (2021). Individual differences in behavioral responses to the financial threat posed by the COVID-19 pandemic. Personality and Individual Differences, 179(1), 1-7.
Al‐Tamimi, H.A.H, & B.KA. Anood. (2009). Financial Literacy and Investment Decisions Of UAE Investors. The Journal of Risk Finance, 10(5), 500-516.
Angelini, V. & D. Cavapozzi. (2017). Dispositional optimism and stock investments. Journal of Economic Psychology, 59, 113-128.
Atkinson, A., & A. Messy. (2010). Assessing Financial Literacy in Countries and OECD Pilot Exercise. Center for Research on Pensions Welfare Policies Journal of Pension Economics & Finance 10(4) ,657-665.
Baihaqqy, M. R. I., N. Disman, M. Sari, & S. Ikhsan. (2020). The Effect of Financial Literacy on the Investment Decision. Budapest International Research and Critics Institute-Journal (BIRCI-Journal), 3(4), 3073-3083.
Beal, D. & S. Delpachitra. (2003). Financial literacy among Australian university students. Economic Papers: a journal of applied economics and policy, 22(1), 65-78.
Chavali, K., & M.P. Mohanraj. (2016). Impact of Demographic Variables and Risk Tolerance on Investment Decisions–an empirical analysis. International Journal of Economics and Financial Issues, 6(1), 169-175.
Darmawan, D. (2022). Pengaruh Lokus Kendali, Lingkungan Sosial dan Perilaku Produktif Mahasiswa terhadap Intensi Berwirausaha. Justek: Jurnal Sains dan Teknologi, 5(2), 422-430.
Darmawan, D., & M. Djaelani. (2022). Hubungan Stres dan Strategi Coping bagi Mahasiswa Fakultas Teknik di Masa Pandemi Covid-19. Ekonomi, Keuangan, Investasi dan Syariah, 3(3), 429−433.
Grable, J.E. (2000). Financial risk tolerance and additional factors that affect risk taking in everyday money matters. Journal of Business and Psychology, 14 (4), 625-630.
Grable, J.E. & R.H. Lytton. (1999). Financial risk tolerance revisited: The development of a risk assessment instrument. Financial Services Review, 8 (3), 163-181.
Hair, J., W. Black, B. Babin, R. Anderson, & R. Tatham. (2006). Multivariate Data Analysis (6th ed.). Upper Saddle River, Pearson Prentice Hall. New Jersey.
Halizah, S. N. & D. Darmawan. (2022). Development Entrepreneurship Intention as an Effort to Improve the Level of the Consumer Household Economy, Bulletin of Science, Technology and Society, 1(1), 30-34.
Hastings, J., & O.S. Mitchell. (2020). How Financial Literacy and Impatience Shape Retirement Wealth and Investment Behaviors. Journal of Pension Economics & Finance, 19(1), 1-20.
Ishtiaq, M., M.S. Tufail, K. Shahzad, M.A. Naseer. (2019). Impact of financial threat on individual's willingness to change financial behavior. Dialogue, 14 (2), 265-281.
Kannadhasan, M., S. Aramvalarthan, S.K. Mitra, V. Goyal. (2016). Relationship between biopsychosocial factors and financial risk tolerance: An empirical study. Journal for Decision Makers, 41 (2), 117-131.
Kurniawan, Y., A. S. Lee, R. K. Khayru, & M. Hariani. (2022). Social Media, Impact on Student Learning Behavior, Bulletin of Science, Technology and Society, 1(1), 15-21.
Mardikaningsih, R., E.A. Sinambela, D. Darmawan & D. Nurmalasari. (2020). Perilaku Konsumtif dan Minat Hubungan Mahasiswa Menggunakan Jasa Pinjaman Online. Jurnal Simki Pedagogia, 3(6), 98-110.
Mardikaningsih, R., E. A. Sinambela, D. Darmawan & S.N. Halizah. (2021). Hubungan Perilaku Produktif dan Minat Mahasiswa Berwirausaha. Jurnal Manajemen, Bisnis, dan Kewirausahaan, 1(1), 121-130.
Mardikaningsih, R. (2022). Reinforcement of Students' Entrepreneurial Intentions through Soft Skills and Hard Skills Empowerment, Bulletin of Science, Technology and Society, 1(3), 6-14.
Nguyen, L., G. Gallery, & C. Newton. (2019). The Joint Influence of Financial Risk Perception and Risk Tolerance on Individual Investment Decision‐Making. Accounting & Finance, 59(S1), 747-771.
Pak, O., & M. Mahmood. (2015). Impact of Personality on Risk Tolerance and Investment Decisions: A Study on Potential Investors of Kazakhstan. International Journal of Commerce and Management, 25(4), 370-384.
Rahman, M. (2020). Propensity toward financial risk tolerance: An analysis using behavioural factors. Review of Behavioral Finance, 12 (3), 259-281.
Shah, N.H., W. Khalid, S. Khan, M. Arif, & M.A. Khan. (2020). An empirical analysis of financial risk tolerance and demographic factors of business graduates in Pakistan. International Journal of Economics and Financial Issues, 10 (4), 220-234.
Widdowson, D., & K. Hailwood. (2007). Financial Literacy and its Role in Promoting a Sound Financial System. Reserve Bank of New Zealand Bulletin, 70(2), 1-57.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2023 Rahayu Mardikaningsih, Didit Darmawan
This work is licensed under a Creative Commons Attribution 4.0 International License.
Most read articles by the same author(s)
- Faridi Faridi, Didit Darmawan, Rommy Hardyansah, Arif Rachman Putra, Agung Satryo Wibowo, Legal Protection for Online-Based Lending Consumers , International Journal of Service Science, Management, Engineering, and Technology: Vol. 4 No. 2 (2023): International Journal of Service Science, Management, Engineering, and Technology (October)
- Abdun Nafi’, Fahmy Riyadin, Didit Darmawan, Experimental Study of 3 KW Generator Damage Types Based on Vibration Signals , International Journal of Service Science, Management, Engineering, and Technology: Vol. 3 No. 2 (2023): International Journal of Service Science, Management, Engineering, and Technology (April)
- Abbas Sofwan Matlail Fajar, Ahmad Fauzi, Didit Darmawan, Arif Rachman Putra, Samsul Arifin, Transformation of Islamic Religious Education in the Digital Landscape and its Implications for Pedagogical Innovation , International Journal of Service Science, Management, Engineering, and Technology: Vol. 8 No. 1 (2025): International Journal of Service Science, Management, Engineering, and Technology (August)
- Reza Ahmad Zahid, Didit Darmawan, Reconceptualizing Digital Literacy Dimensions as Predictors of Academic Engagement and Success in Contemporary Higher Education , International Journal of Service Science, Management, Engineering, and Technology: Vol. 7 No. 3 (2025): International Journal of Service Science, Management, Engineering, and Technology (June)
- Tamjidillah Noor, Arif Rachman Putra, Mahmud Suyuti, Rafadi Khan Khayru, Mila Hariani, Fayola Issalillah, Rahayu Mardikaningsih, Implementation of Criminal Regulations on The Use of Hazardous Chemicals in Food Distribution , International Journal of Service Science, Management, Engineering, and Technology: Vol. 4 No. 3 (2023): International Journal of Service Science, Management, Engineering, and Technology (December)
- Muhammad Rezza, Rommy Hardyansah, Didit Darmawan, Alfi'atiyatul Mubasyiroh, Fayola Issalillah, The Enforcement of Organ Transplantation From Corpse Donors in Perspective of The Law , International Journal of Service Science, Management, Engineering, and Technology: Vol. 5 No. 1 (2024): International Journal of Service Science, Management, Engineering, and Technology (February)
- Mahmud Mahmud, Didit Darmawan, Rafadi Khan Khayru, Reny Nuraini, Fayola Issalillah, Enforcement of Criminal Law Against Perpetrators of Environmental Pollution , International Journal of Service Science, Management, Engineering, and Technology: Vol. 4 No. 1 (2023): International Journal of Service Science, Management, Engineering, and Technology (August)
- Adebayo Oluwatosin, Didit Darmawan, The Relationship Between Psychological Well-Being and Social Interaction: Reconstructing Social Exchange Theory in a Cross-Cultural Perspective , International Journal of Service Science, Management, Engineering, and Technology: Vol. 6 No. 3 (2024): International Journal of Service Science, Management, Engineering, and Technology (December)
- Siti Miftachul Jannah, Rahayu Mardikaningsih, Strategies for Improving Bureaucratic Efficiency and Employee Performance , International Journal of Service Science, Management, Engineering, and Technology: Vol. 4 No. 2 (2023): International Journal of Service Science, Management, Engineering, and Technology (October)
- Pratika Novia Rimadhani, Rahayu Mardikaningsih, Fayola Issalillah, Sulani Sulani, Elly Christanty Gautama , The Impact of Tax Regulation on Taxpayer Compliance in the Micro, Small, and Medium Enterprises Sector: A Legal Literature Review , International Journal of Service Science, Management, Engineering, and Technology: Vol. 6 No. 3 (2024): International Journal of Service Science, Management, Engineering, and Technology (December)
