Generation Z Investment Decisions Influenced by Financial Behavior: Mediated by Financial Literacy

Abstract

Generation Z, born between the mid-1990s and early 2010s, has become a desirable demographic for the financial industry due to their unique upbringing in the digital age. This generation is proficient with technology, cellphones, and online platforms. Generation Z is well-suited for digital banking services, online investing platforms, and other fintech advances. This study investigates the impact of financial literacy on investment decisions, using financial behaviour as a mediator, based on the Theory of Planned Behaviour. Employing a quantitative methodology, a study was conducted on a group of 110 Generation Z individuals that engage in stock market investments in Malang City. Through the application of Structural Equation Modelling (SEM) research, it is demonstrated that financial literacy exerts an impact on both financial behaviour and investment decisions. Furthermore, financial behaviour acts as a mediator in the relationship between financial literacy and investment decisions. Research findings suggest that Generation Z in Malang City should enhance their ability to forecast investment risks in order to make more informed investment choices. Generation Z is anticipated to consistently seek knowledge pertaining to strong investment portfolios from fellow investors in order to enhance their investment choices.