Risk-Taking, Financial Knowledge, and Risky Investment Intention: Expanding Theory of Planned Behavior Using a Moderating-Mediating Model

Abstract

This research examines the impact of financial knowledge on risky investment intention via the lens of the theory of planned behavior (TPB). The research developed a comprehensive model to test the mediation effect of the three TPB antecedents on the link between financial knowledge and risky investment intention. The research investigates the moderating effect of risk-taking on the link between three TPB constructs and risky investment intention. For these purposes, we used a pre-tested survey, was directed to senior university students in public universities in Saudi Arabia. The findings of SmartPLS showed a significant positive influence of financial knowledge on attitudes towards risky investment, subjective norms (SNs), and perceived behavioral control (PBC). Both SNs and PBC have a significant positive influence on risky investment intention. Nonetheless, the personal attitude of students failed to have a significant direct or mediating influence on risky investment intention. Additionally, risk-taking did not have a moderating effect on the link between personal attitude and risky investment intention. Students belong to a risk-adverse culture, which could justify the insignificant impact of their personal attitudes on risky investment intention. On the other side, SNs and PBC have a mediating effect on the link between financial knowledge and risky investment intention. Risk-taking has a moderating effect on the link between SNs, PBC, and risky investment intention. The research extends the use of TPB by validating its assumptions about driving the investment intention of university graduates.