Title: Financial literacy, investment behaviour and socio-demographic variables: evidence from India

Authors: Kapil Choudhary; Smriti Kamboj; Sakshi Mehta

Addresses: Department of Commerce, Choudhary Devi Lal University, Sirsa – 125055, Haryana, India ' Department of Commerce, Government National College, Sirsa – 125055, Haryana, India ' Department of Commerce, Government National College, Sirsa – 125055, Haryana, India

Abstract: This paper examines how investment behaviour and financial literacy are interlinked and determine the impact of socio-demographic variables on the financial literacy and investment behaviour. The study uses a questionnaire to measure and understand the level of financial literacy and investment behaviour of 477 respondents in India. The study uses multinomial logistic regression to examine the survey data. The findings show that only one third of the respondents exhibits a higher level of financial literacy. The evidence also shows that financial literacy has a significant positive association with the age and income of the respondents. The results exhibit that nearly half of the respondents appear in the negative investment behaviour category. The evidence suggests that gender, residence, and work situation positively affect the investment behaviour of respondents. Regarding the linkage between financial literacy and investment behaviour, the study documents that the financial attitude- a key component of financial literacy- shows statistically significant negative influence on the investment behaviour.

Keywords: investment behaviour; financial literacy; socio-demographic factors; financial attitude; logistic regression.

DOI: 10.1504/IJBAF.2021.116167

International Journal of Behavioural Accounting and Finance, 2021 Vol.6 No.3, pp.243 - 261

Received: 04 Oct 2020
Accepted: 24 Mar 2021

Published online: 12 Jul 2021 *

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