Behavioral Biases, Financial Literacy, and Female Investors: The Role of Social Media
Abstract
The Indonesian capital market faces challenges in investor growth, particularly with low investment levels among women. Female investors lag behind men in both the number of investors and the value of investments. Despite an increase in the number of female investors, their investment values remain low, indicating limited active participation. This research aims to examine how financial literacy and behavioral biases influence Indonesian female investors decisions, with social media as a moderating variable. Using a sample of 126 female investors, the test was conducted with PLS-SEM. The results showed that regret aversion bias significantly negatively impacts female investors decisions, while financial literacy has a positive and significant effect. Overconfidence bias and herding behavior do not significantly influence investment decisions. Social media does not moderate the effects of these biases and financial literacy on investment decisions but could act as predictor moderation variable with significant positive impact on investment decisions.
Keywords: behavior bias; financial literacy; social media; women’s investment decision
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References
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Pompian, (2006). Behavioral finance and wealth management how to build optimal portfolios that account for investor biases. Willer Finance.
Putri et al., (2019). Pengaruh faktor Lingkungan, literasi keuangan, efikasi keuangan dan faktor demografi terhadap pengambilan keputusan investasi (studi kasus pada mahasiswa magister fakultas ekonomi universitas andalas padang). Jurnal Ilmiah Mahasiswa Ekonomi Manajemen, 4 (1), 210-214.
Rasheed et al., (2018). Factors influencing investor’s decision making in Pakistan moderating the role of locus of control. Review of Behavioral Finance, 10(1), 70-87. https://doi.org/10.1108/RBF-05-2016-0028
Rasool & Ullah, (2020).“Financial literacy and behavioural biases of individual investors: empirical evidence of Pakistan stock exchange”, Journal of Economics, Finance and Administrative Science, Vol. 25 No. 50, pp. 261-278. https://doi.org/10.1108/JEFAS-03-2019-0031
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Shaari et al., (2013). Financial literacy: A study among the university student. Interdisciplinary Journal of Contemporary Research in Business, 5(2), 279–299.
Shusha, A.A., & Touny, Abdelaziz (2016).The attitudinal Determinants of Adopting the Herd Behavior: An Applied Study on the Egyptian Exchange. Journal of Finance and Investment Analysis. vol. 5(1): 5-69.
Subramanian, R & Prerana.M, (2021).Social-Media Influence on the Investment Decisions Among the Young Adults in India. Asia-Pacific Journal of Management and Technology. 02. 17-26. https://doi.org/10.46977/apjmt.2021v02i01.003
Suresh G, (2021).Impact of Financial literacy and Behavioural Biases on Investment Decision-making. FIIB Business Review. 231971452110354. 10.1177/23197145211035481.
(Susanto et al., (2022).Gender Differences, Framing, and Responsibility in Investment Decision Making: An Experimental Study. Journal of Accounting and Investment, 24(1), 137-154.
Talha, M., Ramanakumar, K. P. V., & Neelakantan, P. R. (2015). Investor psychology and its influence on investment decision. MAGNT Research Report, 3(9), 281–292.
Tandon & Jain, (2022). Impact of Social Media on Investment Decisions among Young Adults. International Journal of Innovative Research In Technology vol 9 issue 1. ISSN: 2349-6002
Ton & Dao, (2014). The effects of psychology on individual investors’ behaviors: Evidence from the Vietnam Stock Exchange. Journal of Management and Sustainability, pp. 125-134.
Usriyono & Wahyudi, (2023).The investment decision of millennial generation: An analysis using financial literacy and financial behavior. Corporate Governance and Organizational Behavior Review. 7. 8-14. 10.22495/cgobrv7i2p1.
Weixiang et al., (2022). An empirical assessment of financial literacy and behavioral biases on investment decision: Fresh evidence from small investor perception. Front Psychol. Sep 26;13:977444. Doi: 10.3389/fpsyg.2022.977444. PMID: 36225674; PMCID: PMC9549276.
Winarta, S (2018). Indonesian Professional Women Behaviour In The Workplace Towards Investment Decision. http://repository.president.ac.id/xmlui/handle/123456789/253
Yanto et al., (2021). The roles of peers and Social media in building financial literacy among the millennial generation: A case of Indonesian economics and business students, Cogent Social Sciences, 7:1, DOI: 10.1080/23311886.2021.1947579
Yeh & Ling, (2022). Confidence in Financial literacy, Stock Market Participation, and Retirement Planning. J Fam Econ Iss 43, 169–186 (2022). https://doi.org/10.1007/s10834-021-09769-1
Adil et al., (2022). “How financial literacy moderate the association between behavior biases and investment decision?”, Asian Journal of Accounting Research, Vol. 7 No. 1, pp. 17-30. https://doi.org/10.1108/AJAR-09-2020-0086.
Ady & Hidayat, (2019). Do Young Surabaya’s Investors Make Rational Investment Decisions? International Journal of Scientific & Technology Research, 8, 319-322.
Almenberg & Dreber, (2015). Gender, stock market participation and financial literacy, Economics Letters 137, 140-142
Alquraan et al., (2016). Do behavioral finance factors influence stock investment decisions of individual investors? (Evidences from Saudi Stock Market). American International Journal of Contemporary Research, 6(3), 159–169.
Arif, K. (2015). Financial literacy and other factors influencing individual’s investment decision: Evidence from a developing economy (Pakistan). Journal of Poverty, Investment and Development, 12, 74-85
Aziz, Nergis (2016).The impact of demographic characteristics on the relationship between trust, individuals' attitudes towards social media and intention to use social media in an emerging economy. International journal of Euro-Mediterranean studies, letnik 9, številka 1, str. 3-30, 93, 97, 101. URN:NBN:SI:DOC-7CT778V0 from http://www.dlib.si
Baig et al., (2021). Exploring Investment Behavior of Women Entrepreneur: Some Future Directions. International Journal of Financial Studies. 9(2):20. https://doi.org/10.3390/ijfs9020020.
Bakar & Yi, (2016). The Impact of Psychological Factors on Investors’ Decision Making in Malaysian Stock Market: A Case of Klang Valley and Pahang. Procedia Economics and Finance, 35(October 2015), 319–328. https://doi.org/10.1016/S2212- 5671(16)00040-X
Baker, Kent & Ricciardi (2015).How biases affect investor behavior. The European Financial Review, 7-10.
Baker et al., (2019). How financial literacy and demographic variables relate to behavioral biases. Managerial Finance, 45(1), 124- 146.
Baker et al., (2021). Personality traits and investor sentiment. Review of Behavioral Finance.
Elizabeth et al., (2020).Investor Behavioral Bias Based on Demographic Characteristics. Advances in Economics, Business and Management Research, volume 115 10.2991/aebmr.k.200127.002.
Fadli & Wijayanto, (2020). Investment Training Moderates the Effect of Financial literacy, Return and Risk on Investment Interest in Capital Markets. Management Analysis Journal, 9(1), 102-112. https://doi.org/10.15294/maj.v9i1.36879
Hsu et al., (2021). Does financial literacy mitigate gender differences in investment behavioral bias?, Finance Research Letters, 41, issue C, number S1544612320316032, https://EconPapers.repec.org/RePEc:eee:finlet:v:41:y:2021:i:c:s1544612320316032.
Iram et al., (2023). Investigating The Mediating Role of Financial literacy on The Relationship Between Women Entrepreneurs’ Behavioral Biases and Investment Decision Making. Gadjah Mada International Journal of Business, 25(1), 93-118. Doi: http://dx.doi.org/10.22146/gamaijb.65457.
Iram et al., (2021). Is Awareness That Powerful? Women’s Financial literacy Support to Prospects Behaviour in Prudent Decision-making. Global Business Review, 0(0). https://doi.org/10.1177/0972150921996185
Junaidi & Nurhidayah, (2023). Social media impact on trading behavior: An examination among Indonesian young adult investors with capital market literacy as a mediator. JEMA: Jurnal Ilmiah Bidang Akuntansi Dan Manajemen, 20(1), 136–155. https://doi.org/10.31106/jema.v20i1.19687
Kappal & Rastogi, (2020). “Investment behavior of women entrepreneurs”, Qualitative Research in Financial Markets, Vol. 12 No. 4, pp. 485-504. https://doi.org/10.1108/QRFM-04-2020-0053
Kartini & Nahda. (2021). Behavioral Biases on Investment Decision: A Case Study in Indonesia. Journal of Asian Finance, Economics and Business, 8, 1231-1240
Kengatharan & Kengatharan, (2014). The influence of behavioral factors in making investment decisions and performance: study on investors of Colombo stock exchange, Sri Lanka. Asian Journal of Finance & Accounting, 6(1), 1-23. https://doi.org/10.1177/0972150919851388.
Khan & Ahmad, (2022).The Effects of Financial literacy and Social media on Financial Behaviour. 10.4324/9781003265887-12.
Kumari, (2017). Impact of social media on biases of individual investor’s decision making. Journal of Management Research and Review. DPU: https://gbsrc.dpu.edu.in/downloads/current-issues/ Sharda-Kumari-Paper-6.PDF
Koti, K. (2019).Financial literacy and its impact on the investment decisions of working women. Humanities & Social Sciences Reviews. 7. 554-561. 10.18510/hssr.2019.7686.
Mahastanti & Hariady, (2014).Determining the Factor Affecting Stock Investment Decision of Potential Women Investors in Indonesian. International Journal of Process Management and Benchmarking. 10.1007/978-981-4560-61-0_31.
Pompian, (2006). Behavioral finance and wealth management how to build optimal portfolios that account for investor biases. Willer Finance.
Putri et al., (2019). Pengaruh faktor Lingkungan, literasi keuangan, efikasi keuangan dan faktor demografi terhadap pengambilan keputusan investasi (studi kasus pada mahasiswa magister fakultas ekonomi universitas andalas padang). Jurnal Ilmiah Mahasiswa Ekonomi Manajemen, 4 (1), 210-214.
Rasheed et al., (2018). Factors influencing investor’s decision making in Pakistan moderating the role of locus of control. Review of Behavioral Finance, 10(1), 70-87. https://doi.org/10.1108/RBF-05-2016-0028
Rasool & Ullah, (2020).“Financial literacy and behavioural biases of individual investors: empirical evidence of Pakistan stock exchange”, Journal of Economics, Finance and Administrative Science, Vol. 25 No. 50, pp. 261-278. https://doi.org/10.1108/JEFAS-03-2019-0031
Salem, (2019).Examining the investment behavior of Arab women in the stock market. Journal of Behavioral and Experimental Finance,Volume 22, Pages 151-160, ISSN 2214-6350. https://doi.org/10.1016/j.jbef.2019.03.001.
Shaari et al., (2013). Financial literacy: A study among the university student. Interdisciplinary Journal of Contemporary Research in Business, 5(2), 279–299.
Shusha, A.A., & Touny, Abdelaziz (2016).The attitudinal Determinants of Adopting the Herd Behavior: An Applied Study on the Egyptian Exchange. Journal of Finance and Investment Analysis. vol. 5(1): 5-69.
Subramanian, R & Prerana.M, (2021).Social-Media Influence on the Investment Decisions Among the Young Adults in India. Asia-Pacific Journal of Management and Technology. 02. 17-26. https://doi.org/10.46977/apjmt.2021v02i01.003
Suresh G, (2021).Impact of Financial literacy and Behavioural Biases on Investment Decision-making. FIIB Business Review. 231971452110354. 10.1177/23197145211035481.
(Susanto et al., (2022).Gender Differences, Framing, and Responsibility in Investment Decision Making: An Experimental Study. Journal of Accounting and Investment, 24(1), 137-154.
Talha, M., Ramanakumar, K. P. V., & Neelakantan, P. R. (2015). Investor psychology and its influence on investment decision. MAGNT Research Report, 3(9), 281–292.
Tandon & Jain, (2022). Impact of Social Media on Investment Decisions among Young Adults. International Journal of Innovative Research In Technology vol 9 issue 1. ISSN: 2349-6002
Ton & Dao, (2014). The effects of psychology on individual investors’ behaviors: Evidence from the Vietnam Stock Exchange. Journal of Management and Sustainability, pp. 125-134.
Usriyono & Wahyudi, (2023).The investment decision of millennial generation: An analysis using financial literacy and financial behavior. Corporate Governance and Organizational Behavior Review. 7. 8-14. 10.22495/cgobrv7i2p1.
Weixiang et al., (2022). An empirical assessment of financial literacy and behavioral biases on investment decision: Fresh evidence from small investor perception. Front Psychol. Sep 26;13:977444. Doi: 10.3389/fpsyg.2022.977444. PMID: 36225674; PMCID: PMC9549276.
Winarta, S (2018). Indonesian Professional Women Behaviour In The Workplace Towards Investment Decision. http://repository.president.ac.id/xmlui/handle/123456789/253
Yanto et al., (2021). The roles of peers and Social media in building financial literacy among the millennial generation: A case of Indonesian economics and business students, Cogent Social Sciences, 7:1, DOI: 10.1080/23311886.2021.1947579
Yeh & Ling, (2022). Confidence in Financial literacy, Stock Market Participation, and Retirement Planning. J Fam Econ Iss 43, 169–186 (2022). https://doi.org/10.1007/s10834-021-09769-1
Published
2025-02-28
How to Cite
SETYADI, Vera; INDARTO, Indarto; INDRIANA, Dian.
Behavioral Biases, Financial Literacy, and Female Investors: The Role of Social Media.
Matrik : Jurnal Manajemen, Strategi Bisnis, dan Kewirausahaan, [S.l.], p. 77 - 93, feb. 2025.
ISSN 2302-8890.
Available at: <https://ojs.unud.ac.id/index.php/jmbk/article/view/118819>. Date accessed: 25 mar. 2025.
doi: https://doi.org/10.24843/MATRIK:JMBK.2025.v19.i01.p07.
Section
Articles
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