An Investigation into the Determinants of Investment Awareness: Evidence from the Young Saudi Generation

Abstract

Investment awareness enables people to make sound and effective decisions in their investment activities. It is evident that many individuals were unsuccessful in managing their investment efficiently. Thus, this study aims to be pioneering among its kind to explore and examine the determinants of investment awareness. To achieve this purpose, we develop a comprehensive quantitative model that investigates the impact of the most essential and suggested drivers of investment awareness (i.e., financial literacy, spending patterns, self-control, saving behavior, attitude toward risk, and family financial socialization). Using convenience sampling, an online questionnaire (using five-point Likert scales) was distributed to a sample of students representing the young generation aged between 18–35 years old from the School of Business and Applied College at King Faisal University. To ratify the validity and reliability of the questionnaire, a pilot test was carried out. For analyzing and interpreting that data, we utilized partial least squares structural equation modeling (PLS-SEM). The reported results of 409 responses show that financial literacy, self-control, saving behavior, and family financial socialization have positive and significant influences on investment awareness. Conversely, spending patterns and attitude toward risk are found to be positively but insignificantly related to investment awareness. These results ratify the need to formulate and implement operative actions to decrease the issue of investment awareness. This study adds to the body of knowledge on the determinants of investment awareness, specifically among the young generation (university students). Furthermore, examining the level of investment awareness could offer vital implications to policymakers, educational institutions, and families on how to enhance the awareness of young investors and support them in making good investment decisions.