Determinants of Individual Investors’ Investment Decisions: Evidence from the Pakistan Stock Exchange Using the UTAUT Framework

Abstract

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.