The Impact of Financial Literacy on Investment Decisions among University Students: The Mediating Role of Investment Intention

Abstract

This study examined the impact of financial literacy on investment decisions among university students, with investment intention as a mediating variable. Financial literacy is considered an important factor in developing responsible financial behavior, particularly among young individuals who are preparing for future financial independence. A quantitative research design was used, and data were collected from 300 university students through a structured questionnaire. The study measured financial literacy, investment intention, and investment decisions using a five-point Likert scale. The collected data were analyzed using SPSS and Smart PLS. Descriptive statistics were used to summarize the demographic profile of the respondents, while Smart PLS was used to assess the measurement model and structural model. The findings showed that financial literacy had a positive and significant effect on investment intention and investment decisions. The results also revealed that investment intention had a significant positive effect on investment decisions. Furthermore, the mediation analysis confirmed that investment intention partially mediated the relationship between financial literacy and investment decisions. These findings suggest that students with higher financial literacy are more likely to develop investment intention, which further improves their investment-related decision-making. The study highlights the importance of financial education in universities and suggests that academic institutions, policymakers, and financial institutions should promote financial literacy programs to encourage responsible investment behavior among students. Overall, the study concludes that financial literacy plays an important role in shaping investment intention and investment decisions among university students.