Investment intentions: a consumer behaviour framework

A wide range of studies has been undertaken in the area of behavioural finance in recent years; but few have used consumer behaviour constructs, which is surprising, as investors go through the same decision-making process when choosing an investment product as does a typical consumer when deciding on a consumer product. Indeed, the investment decision-making process may be even more complicated as it often involves a larger sum of money. Consequently, consumer behaviour constructs seem likely to provide useful additional explanation. The objective of the present study was to examine the effects a number of consumer behaviour constructs had on investors' intentions to invest in the stock market. Specifically, two pre-dispositional constructs (i.e. risk avoidance and uncertainty avoidance), one general ability construct (i.e. self-efficacy) and two category specific ability constructs (i.e. product knowledge and product involvement) were chosen to see whether they influenced retail investors' perceptions of risk and uncertainty and their intentions to invest in shares. The study yielded interesting findings. It was found that the category specific abilities of product knowledge and product involvement had the greatest impact on investment intentions, whereas general self-efficacy did not have much impact on investment intentions. This adds to our understanding of the factors that would impact on the investment decision-making process. The findings revealed that perceived risk was the only mediating construct with partially mediating effects. Perceived uncertainty did not have any mediating effect.