Abstract
This study uses three dimensions of financial literacy, namely financial knowledge, financial behavioral and financial attitude. This study examines the effect of financial literacy on investment decision behavior. This research takes data from entrepreneurs in Bali, Indonesia. Bali has an entrepreneurial ratio to population that is higher than the national average. The regression results show (1) financial knowledge does not affect investment decision making, (2) financial behavior does not affect investment decision making, (3) financial attitude has a positive effect on investment decision making. These results indicate that the financial knowledge and how someone behaves about finance does not have an impact on investment decisions as an entrepreneur. Entrepreneurs in our sample may become an entrepreneur even though does not have sufficient financial knowledge and has not shown good financial management behavior.
Highlights
Bali is one of the provinces in Indonesia with higher economic growth above national economic growth
Based on the National Survey on Financial Literacy and Financial Inclusion conducted by the Financial Services Authority (OJK) in 2016, the Financial Literacy Index in Bali Province was 37.5%, higher than the national average of 29.7%
This study aims to determine whether there is a relationship between financial literacy and investment decision behavior at the individual level
Summary
Bali is one of the provinces in Indonesia with higher economic growth above national economic growth. Based on the National Survey on Financial Literacy and Financial Inclusion conducted by the Financial Services Authority (OJK) in 2016, the Financial Literacy Index in Bali Province was 37.5%, higher than the national average of 29.7%. The Financial Literacy Index in Bali Province is ranked fourth after DKI Jakarta, DI Yogyakarta, and Banten. The Financial Inclusion Index in Bali was 76.0%, higher than the national average of 67.8%. The Financial Inclusion Index in Bali is ranked third nationally after DKI Jakarta and DI Yogyakarta. This study aims to determine whether there is a relationship between financial literacy and investment decision behavior at the individual level. This study was conducted on entrepreneurs in Bali. An entrepreneur plays an important role in making investment decisions in his business. This study will examine how the role of financial literacy in investment decision behavior
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