Determinants of Individual Investors’ Investment Decisions: Evidence from the Pakistan Stock Exchange Using the UTAUT Framework
DOI:
https://doi.org/10.65072/jebim.v1i1.4Keywords:
individual investors, investment decision-making, Pakistan Stock Exchange, technology adoption, financial literacy, emerging financial marketsAbstract
This study examines the applicability of the Unified Theory of Acceptance and Use of Technology (UTAUT) in explaining the factors that influence individual investors’ investment decisions in the Pakistan Stock Exchange. Originally developed to analyze technology adoption behavior, the UTAUT framework is adapted in this study to assess the antecedents of investment behavior within the context of a developing financial market. Specifically, the study investigates the four core constructs of the model—performance expectancy, effort expectancy, social influence, and facilitating conditions—and their effects on individual investment decisions. Quantitative data were collected from a sample of 210 individual investors using a structured questionnaire based on a five-point Likert scale. Structural equation modeling (SEM) was employed to examine the relationships among the study constructs. In addition, the moderating effects of age, gender, investment experience, and voluntariness of use were analyzed to provide deeper insights into investor behavior within the Pakistan Stock Exchange context. The findings are expected to offer meaningful contributions to both theory and practice. From a theoretical perspective, the study extends the application of the UTAUT model to individual investment decision-making in emerging financial markets. Empirically, the results indicate that financial capital and financial literacy are critical determinants of investment decisions. Furthermore, perceived profitability, perceived productivity, and expectations of performance improvement emerge as significant factors, reflecting the central role of performance expectancy within the model. The study yields important policy, educational, and managerial implications for Pakistan and other emerging economies. In particular, it highlights the need for targeted technology adoption and financial literacy interventions that align with the specific characteristics and expectations of individual investors in the Pakistan Stock Exchange. By applying the UTAUT framework to the investment context of a developing market, this research enriches the literature on financial decision-making and technology acceptance and provides a robust foundation for future research and practical interventions aimed at enhancing investor participation, confidence, and overall market development.
References
Atkinson, A., & Messy, F. A. (2012). Measuring financial literacy. Journal of Consumer Affairs, 44(2), 296–316. https://doi.org/10.1111/j.1745-6606.2010.01170.x
Awais, M., Laber, M. F., Rasheed, N., & Khursheed, A. (2016). Impact of financial literacy and investment experience on risk tolerance and investment decisions: Empirical evidence from Pakistan. International Journal of Economics and Financial Issues, 6(1), 73–79.
Baker, M., & Wurgler, J. (2007). Investor sentiment in the stock market. Journal of Economic Perspectives, 21(2), 129–151. https://doi.org/10.1257/jep.21.2.129
Barber, B. M., Odean, T., & Zhu, N. (2008). Do retail trades move markets? The Review of Financial Studies, 22(1), 151–186. https://doi.org/10.1093/rfs/hhn035
Behl, A., Pereira, V., Sindhwani, R., Bhardwaj, S., Papa, A., & Hassan, Y. (2022). Improving inclusivity of digitalization for employees in emerging countries using gamification. IEEE Transactions on Engineering Management, 71, 13867–13881. https://doi.org/10.1109/TEM.2022.3216553
Cookson, J. A., Lu, R., Mullins, W., & Niessner, M. (2024). The social signal. Journal of Financial Economics, 158, Article 103870. https://doi.org/10.1016/j.jfineco.2024.103870
Hastings, J. S., Madrian, B. C., & Skimmyhorn, W. L. (2013). Financial literacy, financial education, and economic outcomes. Annual Review of Economics, 5(1), 347–373. https://doi.org/10.1146/annurev-economics-082312-125807
Hong, H., & Stein, J. C. (2007). Disagreement and the stock market. Journal of Economic Perspectives, 21(2), 109–128. https://doi.org/10.1257/jep.21.2.109
Kline, T. J. (2017). Sample issues, methodological implications, and best practices. Canadian Journal of Behavioural Science / Revue canadienne des sciences du comportement, 49(2), 71–77. https://doi.org/10.1037/cbs0000054
Kurniawan, D. (2023). The effect of financial literacy, performance expectancy, effort expectancy, and money saving to use decision financial technology in the millennial generation in North Bekasi. East Asian Journal of Multidisciplinary Research, 2(1), 63–72. https://doi.org/10.55927/eajmr.v2i1.2170
Lusardi, A., & Mitchell, O. S. (2014). The economic importance of financial literacy: Theory and evidence. Journal of Economic Literature, 52(1), 5–44. https://doi.org/10.1257/jel.52.1.5
Lusardi, A., & Tufano, P. (2015). Debt literacy, financial experiences, and overindebtedness. Journal of Pension Economics & Finance, 14(4), 332–368. https://doi.org/10.1017/S1474747215000232
Mohamed, N., Mahadi, B., Miskon, S., & Haghshenas, H. (2023). Determinants and influences of information systems integration in a public higher education context. International Journal of Asian Business and Information Management, 14(1), 1–24. https://doi.org/10.4018/IJABIM.330987
Tang, M., Hu, Y., Corbet, S., Hou, Y. G., & Oxley, L. (2024). Fintech, bank diversification and liquidity: Evidence from China. Research in International Business and Finance, 67, Article 102082. https://doi.org/10.1016/j.ribaf.2023.102082
Uttal, D. H., Meadow, N. G., Tipton, E., Hand, L. L., Alden, A. R., Warren, C., & Newcombe, N. S. (2013). The malleability of spatial skills: A meta-analysis of training studies. Psychological Bulletin, 139(2), 352–402. https://doi.org/10.1037/a0028446
Van Rooij, M., Lusardi, A., & Alessie, R. (2011). Financial literacy and stock market participation. Journal of Financial Economics, 101(2), 449–472. https://doi.org/10.1016/j.jfineco.2011.03.006
Venkatesh, V., Morris, M. G., Davis, G. B., & Davis, F. D. (2003). User acceptance of information technology: Toward a unified view. MIS Quarterly, 27(3), 425–478. https://doi.org/10.2307/30036540
Venkatesh, V., Thong, J. Y. L., & Xu, X. (2012). Consumer acceptance and use of information technology: Extending the unified theory of acceptance and use of technology. MIS Quarterly, 36(1), 157–178. https://doi.org/10.2307/41410412
Willis, L. E. (2008). Against financial-literacy education. Iowa Law Review, 94, 197–285.
Zhang, Q., Khan, S., Cao, M., & Khan, S. U. (2023). Factors determining consumer acceptance of NFC mobile payment: An extended mobile technology acceptance model. Sustainability, 15(4), Article 3664. https://doi.org/10.3390/su15043664
Additional Files
Published
Issue
Section
License
This work is licensed under a Creative Commons Attribution 4.0 International License (CC BY 4.0).
