Financial Literacy and Financial Behaviour on Investment Decision Making Among Generation Z: The Mediating Role of Financial Attitude

Abstract

This study examines the influence of financial literacy and financial behaviour on investment decision making among Generation Z, with financial attitude as a mediating variable. A quantitative survey design was employed, involving 125 Generation Z respondents (aged 18–27) currently investing in mutual funds, equities, or digital/crypto assets. Data were analysed using a regression-based path analysis on standardized composite construct scores, with mediation tested through bootstrapping (5,000 resamples). The measurement model showed adequate convergent validity, discriminant validity, and reliability for all constructs. Financial behaviour significantly affected financial attitude (β = 0.434, p < .001), while the effect of financial literacy on attitude was not significant (β = 0.150, p = .069). Financial attitude significantly affected investment decision making (β = 0.424, p < .001), and both financial literacy (β = 0.301, p < .001) and financial behaviour (β = 0.158, p = .043) significantly affected it directly. Financial attitude partially mediated the effect of financial behaviour on investment decisions (VAF = 53.3%), but did not significantly mediate the effect of financial literacy. These findings suggest that financial behaviour shapes investment decisions partly through attitude formation, while financial literacy operates mainly through a direct pathway.