The Influence of Financial Literacy on Investment Decision-Making Behavior in the Community of Jember City
Keywords:
Finance, Financial Literacy, Decision MakingAbstract
This study examines the factors influencing investment decision-making in Jember City, focusing on income, money management, and expenditure. Despite the critical role of financial literacy in fostering investment, a 2019 survey by KSEI revealed only 4,102 registered investors in Jember Regency, indicating low investment interest. Addressing this gap, the study employs a quantitative approach with purposive sampling, involving 80 respondents from the local community. Multiple linear regression analysis reveals that income, money management, and expenditure significantly and positively affect investment decisions, with significance values of 0.002, 0.003, and 0.000, respectively. The model's R² value of 0.930 indicates that these variables explain 93% of the variance in investment decisions. The findings suggest that enhancing financial literacy and personal financial management skills can boost investment participation in the region.
References
M. F. Hendy, AZ Capital Market Terms: A Collection of Popular Capital Market Terms, Especially in the Indonesian Capital Market, Covering Various Terms Related to Stock Trading, Bonds, Mutual Funds, Derivative Instruments, and Various Other Related Terms, Elex Media Komputindo, 2008.
E. T. K. Arniwita, O. Abriyoso, and B. Wijayantini, Manajemen Keuangan: Teori dan Aplikasi, Solok: CV Insan Cendekia Mandiri, 2021.
M. Irman, "Analysis of Factors Influencing Financial Literacy Among Students of Muhammadiyah University of Riau Pekanbaru," J. Econ. Bus. Account., vol. 1, no. 2, pp. 180–197, May 2018, doi: 10.31539/costing.v1i2.205.
H. Hartina, M. Mustafa, and U. Khair, "The Influence of Sociodemographics and Financial Literacy on Investment Decisions in the Millennial Generation," Point J. Econ. Manag., vol. 4, no. 2, pp. 86–100, Dec. 2022, doi: 10.46918/point.v4i2.1611.
F. R. Santoso, B. Wijayantini, and T. Sobri, "Unlocking the Potential: How Financial Inclusion and Financial Behavior Drive Growth in Culinary MSMEs," Int. Soc. Sci. Hum., vol. 2, no. 3, pp. 892–898, 2023.
D. Mulyantini and S. Indriasih, Smart Understanding and Managing Finances for People in the Digital Information Era, Scopindo Media Library, 2021.
B. Ardian, N. Rizky, and C. Capah, "Introduction to Investment and Long-Term Financial Planning for the Community of Kwala Serapuh Village, Langkat Regency," J. Soc. Responsive B. Proj. High. Educ. Forum, vol. 4, no. 2, 2023, doi: 10.47065/jrespro.v4i2.4532.
M. Sugiyono, Educational Research Methods: Quantitative, Qualitative, and R&D Approaches, Bandung: Alphabet, 2015.
Ghazali, Multivariate Analysis Application with IBM SPSS 23 Program (VIII Printing), Semarang: Diponegoro University Publishing Agency, 2016.
E. W. H. Budianto, "Bibliometric and Literature Review of Financing Risk in Islamic Banking," J. Islamic Bank. JPS, vol. 4, no. 1, pp. 79–97, Apr. 2023, doi: 10.46367/jps.v4i1.1031.
D. Loerwald and A. Stemmann, "Behavioral Finance and Financial Literacy: Educational Implications of Biases in Financial Decision Making," Int. Handb. Fin. Lit., pp. 25–38, 2016.
L. Mandell and K. O. Hanson, "The Impact of Financial Education in High School and College on Financial Literacy and Subsequent Financial Decision Making," Am. Econ. Assoc. Meet., San Francisco, CA, vol. 51, 2009.
Lusardi, "Numeracy, Financial Literacy, and Financial Decision-Making," Natl. Bureau Econ. Res., no. w17821, 2012.
J. H. Fong et al., "Financial Literacy and Financial Decision-Making at Older Ages," Pacific-Basin Fin. J., vol. 65, p. 101481, 2021.
Lusardi, "Financial Literacy and the Need for Financial Education: Evidence and Implications," Swiss J. Econ. Stat., vol. 155, no. 1, pp. 1–8, 2019.
D. James et al., "The Impact of Health and Financial Literacy on Decision Making in Community-Based Older Adults," Gerontology, vol. 58, no. 6, pp. 531–539, 2012.
J. Hussain, S. Salia, and A. Karim, "Is Knowledge That Powerful? Financial Literacy and Access to Finance: An Analysis of Enterprises in the UK," J. Small Bus. Enterp. Dev., vol. 25, no. 6, pp. 985–1003, 2018.
B. F. Arianti, "The Influence of Financial Literacy, Financial Behavior and Income on Investment Decision," Econ. Account. J., vol. 1, no. 1, pp. 1–10, 2018.
Lusardi and O. S. Mitchell, "Financial Literacy Around the World: An Overview," J. Pension Econ. Fin., vol. 10, no. 4, pp. 497–508, 2011.
M. H. Yuneline, M. Hedismarlina, and U. Suryana, "Financial Literacy and Its Impact on Funding Source’s Decision-Making," Int. J. Appl. Econ. Fin. Account., vol. 6, no. 1, pp. 1–10, 2020.
