Analysis of the Influence of Financial Literacy, Investment Knowledge, Financial Behavior, and Risk Tolerance on Investment Behavior among Millennials in Indonesia

Angga Tri Adi Putra; Vip  Paramarta; Kosasih Kosasih

doi:10.71435/742106

Authors

Angga Tri Adi Putra Program Pascasarjana Magister Manajemen, Universitas Sangga Buana YPKP, Bandung, Indonesia
Vip Paramarta Program Pascasarjana Magister Manajemen, Universitas Sangga Buana YPKP, Bandung, Indonesia
Kosasih Program Pascasarjana Magister Manajemen, Universitas Sangga Buana YPKP, Bandung, Indonesia

DOI:

https://doi.org/10.71435/742106

Keywords:

Financial Literacy, Investment Knowledge, Financial Behavior, Risk Tolerance, Investment Behavior, Millennials

Abstract

Investment participation among Indonesian millennials has expanded along with broader access to financial services and digital investment platforms; however, higher participation does not necessarily indicate better investment behavior. This study examines the effects of financial literacy, investment knowledge, financial behavior, and risk tolerance on the investment behavior of millennials in Indonesia. A quantitative descriptive-verificative, cross-sectional design was employed. Data were collected using a Likert-scale questionnaire from 100 millennial respondents with investment experience. Path analysis using SPSS 26 was applied after validity, reliability, and normality testing. The path coefficients were 0.278 for financial literacy (p<0.001), 0.238 for investment knowledge (p=0.016), 0.398 for financial behavior (p<0.001), and 0.132 for risk tolerance (p=0.011). All four variables had positive and significant partial effects on investment behavior. Financial behavior generated the largest total effect (33.88%), followed by financial literacy (21.07%), investment knowledge (19.80%), and risk tolerance (5.28%). Simultaneously, the four variables explained 80.1% of the variance in investment behavior (R²=0.801; F=95.527; p<0.001). These findings indicate that strengthening day-to-day financial behavior is the most dominant factor, while financial literacy, investment-instrument knowledge, and risk awareness remain essential for developing more rational and planned investment behavior.

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