The Effect of Financial Literation and Demographic Factor on Investment Decision Mediated by Over-Confidence

Abstract

This research aims to examine the influence of financial literation and demographic factors on investment decision of government officers in Jabodetabek. The study also tests the role of overconfident as a mediating variable in this relationship. Data collection uses a simple random sampling method using a questionnaire via an online survey to 194 respondents. Data analysis was carried out using the Structural Equation Modelling (SEM) technique with the help of the Partial Least Square (PLS) analysis tool. The results of this research show that financial literation has positive significant effect direct and indirectly on investment decision. Contrary, demographic factor does not have direct and indirect effect significantly. This study provides evidence and valuable insight on how government officers make their investment decision. The novelty of this study is that demographic factor does not affect significantly on investment decision thru overconfident. By understanding government officer profile, this study suggests to make a clear regulation to encourage investment decision as its benefit to their financial management to be and as the vital instrument to Indonesian economic growth.