Determinants of Risky Investment Intention among Generation Y: An Evidence from Indonesia

Abstract

This paper tries to analyze the factors that influence Generation Y's risky investment intention in Indonesia within the behavioral theory. The study contributes to investor's behavior theory in a comprehensive model to explain Generation Y's intention to invest in an emerging market. This study used a quantitative approach using primary data collected using an online questionnaire. A purposive sampling method was used to determine the targeted respondent. Responses from 421 respondents then evaluated to estimate the influence of emotional intelligence, locus of control, financial literacy, risk preference, subjective norms, and religiosity are proposed to explain Indonesian Generation Y's risky investment intention using a multiple regression model. The main result shows us that all determinants have a significant influence on risky investment intention. The results then can be further tested across countries. Emotional intelligence, risk preference, locus of control, subjective norms, religiosity, and financial literacy positively and significantly affect risky investment intention. On the other hand, religiosity has a negative and significant impact on a risky investment in Generation Y in Indonesia. The limitation of this study is no preliminary qualitative phase was conducted before the survey and data collection. The result of this study is expected to benefit policymakers and investment market regulators to formulate accurate regulations regarding investment products and trading activities. In addition, by having a well-designed education strategy, it is expected that retail investors, especially those who come from Generation Y, could maximize their contribution in the investment market.