Understanding Determinants of Individual Intention to Invest in Digital Risky Investment

Willy Abdillah, Rika Permatasari, Ernie Hendrawaty


This study examines the effect of emotional intelligence, the locus of control, and risk aversion on intention to risky investment with financial literacy as moderating effect. This study uses 98 investors distributed by online questionnaire. Data examined using Partial Least Square (PLS) technique. The results show that the emotional intelligence, the locus of control have a positive effect and risk aversion and financial literacy have a negative effect on intention to a risky investment. However, there is no moderating effect of financial literacy on those direct effects. The implication for stakeholder and further research are discussed.


Emotional Intelligence; locus of control; risk aversion; financial literacy; intention to risky investment

Full Text:



Abdillah, W., & Hartono, J. (2015). Partial Least Square (PLS): Alternatif Structural Equation Modeling (SEM) dalam Penelitian Bisnis. Yogyakarta: Penerbit Andi.

Ajzen, I. (1991). The Theory of Planned Behavior. Organizational Behavior Human Decision Processes, 50(2), 179-211.

Ajzen, I. (2002). Perceived Behavioral Control, Selfâ€Efficacy, Locus of Control, and the Theory of Planned Behavior. Journal of Applied Social Psychology, 32(4), 665-683.

Ajzen, I., & Fishbein, M. (1977). Attitude-Behavior Relations: a Theoretical Analysis and Review of Empirical Research. Psychological Bulletin, 84(5), 888.

Akerlof, G. A., Shiller, R. J., Domaniç, N., & Konyar, L. (2010). Hayvansal Güdüler: İnsan Psikolojisi Ekonomiyi Nasıl Yönlendirir ve Küresel Kapitalizm Için Niçin Onemlidir: Scala Yayıncılık.

Ameriks, J., Wranik, T., & Salovey, P. (2009). Emotional Intelligence and Investor Behavior: Research Foundation of CFA Institute Charlottesville, VA.

Anbar, A., & Melek, E. J. E. A. B. D. (2010). An Empirical Investigation for Determining of the Relation between Personal Financial Risk Tolerance and Demographic Characteristic. Ege Akademik Bakış Dergis, 10(2), 503-522.

Aren, S., & Aydemir, S. D. J. J. O. G. S. M. (2014). Some Considerations on Emotional Intelligence. Journal of Global Strategic Management, 15(2), 49-56.

Bajtelsmit, V. L., & Bernasek, A. (1996). Why do Women Invest Differently than Men?. Financial Counseling, 7.

Batool, B. F. (2013). Emotional Intelligence and Effective Leadership. Journal of Business Studies Quarterly, 4(3), 84.

Brounen, D., Koedijk, K. G., & Pownall, R. A. (2016). Household Financial Planning and Savings Behavior. Journal of International Money Finance, 69, 95-107.

Carpentier, A., Brijs, K., Declercq, K., Brijs, T., Daniels, S., Wets, G., & Prevention. (2014). The Effect of Family Climate on Risky Driving of Young Novices: the Moderating Role of Attitude and Locus of Control. Accident Analysis, 73, 53-64.

Chapman, J. (2006). Anxiety and Defective Decision Making: an Elaboration of the Groupthink Model. Management Decision, 44(10), 1391-1404.

Chin, W. W. (2010). How to Write up and Report PLS Analyses, Handbook of Partial Least Squares: 655-690: Springer.

Ciarrochi, J., Chan, A. Y., & Bajgar, J. (2001). Measuring Emotional Intelligence in Adolescents. Personality Individual Differences, 31(7), 1105-1119.

Cobb-Clark, D. A., Kassenboehmer, S. C., Sinning, M. G., & Finance. (2016). Locus of Control and Savings. Journal of Banking, 73, 113-130.

Cooper, T., & Faseruk, A. (2011). Strategic Risk, Risk Perception, and Risk Behavior: Meta-Analysis. Journal of Financial Management Analysis, 24(2).

Crisp, B. R., & Barber, J. G. (1995). The Effect of Locus of Control on the Association between Risk Perception and Sexual Risk-Taking. Personality Individual Differences, 19(6), 841-845.

Demaree, H. A., DeDonno, M. A., Burns, K. J., & Everhart, D. E. (2008). You Bet: How Personality Differences Affect Risk-Taking Preferences. Personality Individual Differences, 44(7), 1484-1494.

Diacon, S. (2004). Investment Risk Perceptions: Do Consumers and Advisers Agree?. International Journal of Bank Marketing, 22(3), 180-199.

Dinç Aydemir, S., & Aren, S. (2017). Do the Effects of Individual Factors on Financial Risk-Taking Behavior Diversify with Financial Literacy?. Kybernetes, 46(10), 1706-1734.

Duxbury, L., Haines, G., & Riding, A. (1996). A Personality Profile of Canadian Informal Investors. Journal of Small Business Management, 34(2), 44.

Ebrahimi, M. R., & Yarahmadzehi, N. (2015). Does Emotional Intelligence have Anything to do with Risk-Taking among Iranian EFL Learners?. Theory Practice in Language Studies, 5(10), 2029-2036.

Ehrhardt, M. C., & Brigham, E. F. (2016). Corporate Finance: a Focused Approach. Cengage Learning.

Foo, M. D. (2011). Emotions and Entrepreneurial Opportunity Evaluation. Entrepreneurship Theory Practice, 35(2), 375-393.

Fünfgeld, B., & Wang, M. (2009). Attitudes and Behaviour in Everyday Finance: Evidence from Switzerland. International Journal of Bank Marketing, 27(2), 108-128.

Grable, J. E. (2000). Financial Risk Tolerance and Additional Factors that Affect Risk Taking in Everyday Money Matters. Journal of Business Psychology, 14(4), 625-630.

Grable, J. E., & Joo, S.-H. (2000). A Cross-Disciplinary Examination of Financial Risk Tolerance. Consumer Interests Annual, 46, 151-157.

Guiso, L., & Jappelli, T. (2008). Financial Literacy and Portfolio Diversification, European University Institute. Economics Working Papers.

Hair, J. F., Black, W. C., Babin, B. J., Anderson, R. E., & Tatham, R. L. (2006). Multivariate Data Analysis (Vol. 6): Upper Saddle River, NJ: Pearson Prentice Hall.

Humphrey, N., Curran, A., Morris, E., Farrell, P., & Woods, K. (2007). Emotional Intelligence and Education: a Critical Review. Educational Psychology, 27(2), 235-254.

Huston, S. J. (2010). Measuring Financial Literacy. Journal of Consumer Affairs, 44(2), 296-316.

Kahneman, D., & Tversky, A. (1979). Prospect Theory: an Analysis of Decision under Risk. Econometrica, 47(2), 363-391.

Kamalian, A., Yaghoubi, N., & Poori, M. (2011). Emotional Intelligence and Corporate Entrepreneurship: an Empirical Study. Journal of Basic Applied Scientific Research, 1(6), 471-478.

KPMG. (2015). Investing in Indonesia.

Kuhnen, C. M., & Chiao, J. Y. (2009). Genetic Determinants of Financial Risk Taking. Plos One, 4(2): e4362.

Larkin, C., Lucey, B. M., & Mulholland, M. (2013). Risk Tolerance and Demographic Characteristics: Preliminary Irish Evidence. Financial Services Review, 22(1).

Lian, C., Ma, Y., & Wang, C. (2018). Low Interest Rates and Risk-Taking: Evidence from Individual Investment Decisions. The Review of Financial Studies, 32(6), 2107-2148.

Lusardi, A., & Mitchelli, O. S. (2007). Financial Literacy and Retirement Preparedness: Evidence and Implications for Financial Education. Business Economics, 42(1), 35-44.

McCarthy, B. (2000). Researching the Dynamics of Risk-Taking and Social Learning: an Exploratory Sstudy of Irish Entrepreneurs. Irish Marketing Review, 13, 46-57.

McNair, S., Summers, B., de Bruin, W. B., & Ranyard, R. (2016). Individual-Level Factors Predicting Consumer Financial Behavior at a Time of High Pressure. Personality Individual Differences, 99, 211-216.

Norvilitis, J. M., Merwin, M. M., Osberg, T. M., Roehling, P. V., Young, P., & Kamas, M. M. (2006). Personality Factors, Money Attitudes, Financial Knowledge, and Creditâ€Card Debt in College Students 1. Journal of Applied Social Psychology, 36(6):,1395-1413.

OJK. (2018). Laporan Triwulan I.

View Counter: Abstract - 530 and PDF - 523


  • There are currently no refbacks.