The influence of personality traits on investment decision-making: a moderated mediation approach
International Journal of Bank Marketing
ISSN: 0265-2323
Article publication date: 21 March 2023
Issue publication date: 23 May 2023
Abstract
Purpose
Behavioral finance proposes that psychology of the individual plays a vital role in investment decisions. Therefore, this study aims to examine the influence of one of the important disciplines of psychology, i.e. personality on investment decision-making by incorporating financial satisfaction as an intervening variable and gender as a moderator.
Design/methodology/approach
The data of 406 valid responses were collected through structured questionnaires from individual investors of Indian stock market and analyzed using structural equation modeling. Several invariance tests were also conducted to perform the multigroup analysis of gender on the mediated model.
Findings
The results revealed that extraversion, agreeableness, conscientiousness and neuroticism significantly influence investment decision-making through financial satisfaction. While financial satisfaction significantly mediates the indirect relationships between personality traits and investment decision-making for both males and females, no significant differences among males and females were found in the mediated model.
Research limitations/implications
The current study covers a limited geographical area of North India. In addition to this, it is cross-sectional in nature and incorporates only limited factors for predicting investment decisions.
Practical implications
The study possesses numerous significant implications for financial practitioners, advisors, investors, academicians and researchers in the field of behavioral finance.
Originality/value
This study suggests a moderated mediation approach, which incorporates financial satisfaction as a mediator and gender as a moderator. To the best of the authors’ knowledge, so far, no study has been conducted in this context, and it will enhance the understanding of investment decisions of individual investors.
Keywords
Acknowledgements
The authors want to thank Prof. Hooman Estelami, the Editor-in-Chief, and the anonymous reviewers for providing their valuable suggestions in the earlier versions of the manuscript.
Citation
Sachdeva, M. and Lehal, R. (2023), "The influence of personality traits on investment decision-making: a moderated mediation approach", International Journal of Bank Marketing, Vol. 41 No. 4, pp. 810-834. https://doi.org/10.1108/IJBM-07-2022-0313
Publisher
:Emerald Publishing Limited
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