Advanced search

Financial literacy and investment decisions of UAE investors

Hussein A. Hassan Al‐Tamimi (Department of Accounting, Finance and Economics, College of Business Administration, University of Sharjah, Sharjah, United Arab Emirates)
Al Anood Bin Kalli (Market Awareness Department, Abu Dhabi Securities Market, Abu Dhabi, United Arab Emirates)

Journal of Risk Finance

ISSN: 1526-5943

Publication date: 6 November 2009

Abstract

Purpose

–

The purpose of this paper is to assess the financial literacy of the UAE individual investors who invest in the local financial markets. In addition, it examines the relationship between financial literacy and the influence of the factors that affect the investment decision.

Design/methodology/approach

–

A modified questionnaire has been developed divided into three parts. The first part covers demographic variables. The second part identifies 37 factors affecting the investment decision of the UAE investors. The third part is devoted to financial literacy using exam‐type questions of true or false and includes 18 questions. A convenient sample of 290 of UAE national investors is used.

Findings

–

The results indicate that the financial literacy of UAE investors is far from the needed level. The financial literacy level is found to be affected by income level, education level, and workplace activity. High‐income respondents hold high educational degrees, and those who work in the field of finance/banking or investment had as expected a higher financial literacy level than others. Whereas, financial illiteracy exists regardless of the age of the respondents. A significant difference in the level of financial literacy was found as well between the respondents according to their gender. Specifically, women have a lower level of financial literacy than men. Finally, the results indicate that there is a significant relationship between financial literacy and investment decisions. The most influencing factor that affects the investment decision is religious reasons and the least affecting factor is rumors.

Originality/value

–

The current study is considered the first of its kind conducted on the UAE. To the best of our knowledge, no such studies have been conducted regarding measuring financial literacy in the UAE or the relation between financial literacy level and the factors that influence the investment decisions.

Keywords

Citation

Hassan Al‐Tamimi, H.A. and Anood Bin Kalli, A. (2009), "Financial literacy and investment decisions of UAE investors", Journal of Risk Finance, Vol. 10 No. 5, pp. 500-516. https://doi.org/10.1108/15265940911001402

Download as .RIS

Publisher

:

Emerald Group Publishing Limited

Copyright © 2009, Emerald Group Publishing Limited

To read the full version of this content please select one of the options below

You may be able to access this content by logging in via Shibboleth, Open Athens or with your Emerald account.
To rent this content from Deepdyve, please click the button.
Rent from Deepdyve
If you think you should have access to this content, click the button to contact our support team.
Contact us
Manage cookies

We’re listening — tell us what you think

Join us on our journey