Exploring the Influence of Parental Financial Behavior, Financial Literacy, and Herding Behavior on Investment Behavior Among Generation Z Investors
Abstract
This study aims to determine the influence of parents' financial behavior, financial literacy and herding behavior toward investment behavior of Generation Z Investors. The population of this study is management students of Universitas Ciputra Surabaya with a total of 364 respondents. The sample selection method utilized purposive sampling technique. The study was conducted by questionnaires and using Structural Equation Model - Partial Least Square (SEM-PLS). The result of this study showed that Parent Financial Behavior has positive effects on Financial Literacy and not directly affecting Investment Behavior of Generation Z investors in management students of Universitas Ciputra Surabaya but rather having indirect effects through Financial Literacy of the students. This study also shows that Herding Behavior has a positive effect on Investment Behavior of undergraduate management students of Ciputra University Surabaya.
References
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Baker, M., & Wurgler, J. (2007). Investor sentiment in the stock market. Journal of Economic Perspectives, 21(2), 129-151.
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Bikhchandani, S., Hirshleifer, D., & Welch, I. (1992). A theory of fads, fashion, custom, and cultural change as informational cascades. Journal of Political Economy, 100(5), 992-1026.
Bikhchandani, S., Hirshleifer, D., & Welch, I. (1998). Learning from the behavior of others: Conformity, fads, and informational cascades. Journal of Economic Perspectives, 12(3), 151-170.
Calvet, L. E., Campbell, J. Y., & Sodini, P. (2009). Measuring the financial sophistication of households. American Economic Review, 99(2), 393-398.
Chang, E. C., Cheng, J. W., & Khorana, A. (2000). An examination of herd behavior in equity markets: An international perspective. Journal of Banking & Finance, 24(10), 1651-1679.
Chawla, D., Bhatia, S., & Singh, S. (2022). Parental influence, financial literacy and investment behaviour of young adults. Journal of Indian Business Research, 14(4), 520–539. https://doi.org/10.1108/jibr-10-2021-0357
Chiang, T. C., Liu, M. H., & Chang, C. L. (2006). The impact of monetary policy on Taiwan stock market. Physica A: Statistical Mechanics and its Applications, 363(2), 539-550.
Chin, W. W. (1998). The partial least squares approach for structural equation modeling. In G. A. Marcoulides (Ed.), Modern methods for business research (pp. 295–336). Lawrence Erlbaum Associates Publishers.
Cipriani, M., Guarino, A., & Guazzarotti, G. (2014). Herding, a-synchronous updating and heterogeneity in memory in a CBS. Journal of Economic Behavior & Organization, 107, 153-180.
Danes, S.M., & Haberman, H. (2007). Teen financial knowledge, self-efficacy, and behavior: a gendered view. Journal of Financial Counseling and Planning, 18(2), 48-60.
Devenow, A., & Welch, I. (1996). Rational herding in financial economics. European Economic Review, 40(3–5), 603–615. https://doi.org/10.1016/0014-2921(95)00073-9
Dewi, M. I. B. L., & Wiagustini, N. L. P. (2022). STUDI FAKTOR YANG MEMENGARUHI PENGAMBILAN KEPUTUSAN INVESTASI SAHAM PADA INVESTOR DI KOTA DENPASAR. BULETIN STUDI EKONOMI, 27, 79–100. https://ojs.unud.ac.id/index.php/bse/index
Feng, L., Seasholes, M. S., & Yang, N. (2009). Does Investor Misvaluation Drive the Takeover Market? Journal of Finance, 64(6), 2515-2547.
Fernandes, D., Lynch Jr, J. G., & Netemeyer, R. G. (2014). Financial literacy, financial education, and downstream financial behaviors. Management Science, 60(8), 1861-1883.
Guiso, L., & Jappelli, T. (2013). Awareness and stock market participation. The Review of Financial Studies, 26(12), 2974-3016.
Gudmunson, C.G. and Danes, S.M. (2011). Family financial socialization: theory and critical review. Journal of Family and Economic Issues, Vol. 32 No. 4, pp. 644-667.
Hair, J. F., Risher, J. J., Sarstedt, M., & Ringle, C. M. (2019). When to use and how to report the results of PLS-SEM. European Business Review, 31(1), 2–24. https://doi.org/10.1108/ebr-11-2018-0203
Hair, J. F., Hult, G. T., Ringle, C. M., Sarstedt, M., Danks, N. P., & Ray, S. (2021). Partial least squares structural equation modeling (PLS-SEM) using R. Classroom Companion: Business. https://doi.org/10.1007/978-3-030-80519-7
Hastings, J. S., & Mitchell, O. S. (2011). How financial literacy and impatience shape retirement wealth and investment behaviors. NBER Working Paper No. 16740.
Hastings, J. S., & Mitchell, O. S. (2013). How financial literacy and impatience shape retirement wealth and investment behaviors. NBER Working Paper No. 16740.
Hira, T. K., & Mugenda, O. (2000). The relationships between perceived parental behaviors and college students' financial satisfaction. Family and Consumer Sciences Research Journal, 28(4), 396-418.
Hung, A. A., Parker, A. M., & Yoong, J. K. (2009). Defining and Measuring Financial Literacy. RAND Labor and Population Working Paper WR-708.
Hwang, S., & Salmon, J. (2004). Herding behavior in Korean capital markets. Pacific-Basin Finance Journal, 12(5), 590-610.
Jorgensen, B.L. and Savla, J. (2010). Financial literacy of young adults: the importance of parental socialization. Family Relations, Vol. 59 No. 4, pp. 465-478.
Kim, J., & Chatterjee, S. (2013). Childhood financial socialization and young adults’ financial management. Journal of Financial Counseling and Planning, 24(1), 61-79.
Kim, J.H. (2015). Parental influence on young adult children’s financial attitudes: moderation effect of financial communication and family environments. ETD collection for University of Nebraska – Lincoln. AAI3738523. Available at: https://digitalcommons.unl.edu/dissertations/AAI3738523
Kimiyaghalam, F., & Yap, S. (2017). Level of financial literacy in Malaysia. International Journal of Research, 4(7), 1065-1074.
KSEI (2022, July 19). Didominasi Milenial dan Gen Z, Jumlah Investor Saham Tembus 4 Juta [berita pers]. https://www.ksei.co.id/files/uploads/press_releases/press_file/id-id/208_berita_pers_didominasi_milenial_dan_gen_z_jumlah_investor_saham_tembus_4_juta_20220725182203.pdf
Kurniasari, I., Sumiati., & Ratnawati, K. (2023). Does parent behavior influence children financial behavior? Journal of International Conference Proceedings, 6(1), 376-384.
Lakonishok, J., Shleifer, A., & Vishny, R. W. (1992). The impact of institutional trading on stock prices. Journal of Financial Economics, 32(1), 23-43.
Lachowicz, M., Preacher, K. J., & Kelley, K. (2018). A novel measure of effect size for mediation analysis. Psychological Methods, 23(2), 244–261. https://doi.org/10.1037/met0000165
Lusardi, A. and Mitchell, O.S. (2007). Baby boomer retirement security: the roles of planning, financial literacy, and housing wealth. Journal of Monetary Economics, Vol. 54 No. 1, pp. 205-224.
Lusardi, A., & Mitchell, O. S. (2008). Planning and financial literacy: How do women fare? American Economic Review: Papers & Proceedings, 98(2), 413-417.
Mankiw, N.G. (2021). Macroeconomics. Macmillan Higher Education.
Montier, J. (2007). Behavioural investing: A Practitioner’s Guide to Applying Behavioural Finance. John Wiley & Sons.
Robb, C. A., & Woodyard, A. S. (2011). Financial knowledge and best practice behavior. Journal of Financial Counseling and Planning, 22(1), 60-70.
Sarstedt, M., Ringle, C. M., & Hair, J. F. (2021). Partial least squares structural equation modeling. In Springer eBooks (pp. 1–47). https://doi.org/10.1007/978-3-319-05542-8_15-2
Shim, S., Barber, B.L., Card, N.A., Xiao, J.J., & Serido, J. (2010). Financial socialization of first-year college students: the roles of parents, work, and education. Journal of Youth and Adolescence, 39(12), 1457-1470.
Soroukou, C.F., & Weissbrod, C.S. (2005). Men and women’s attachment and contact patterns with parents during the first year of college. Journal of Youth and Adolescence, 34, 221-228.
Tamara, D., Arianto, A. Y., Marzuki, E., & Zulhamdani. (2022). The Effect of Financial Literacy, Herding Behavior and Risk Tolerance on Investment Decisions. Budapest International Research and Critics Institute Journal, 5, 30259–30271. https://www.bircu-journal.com/index.php/birci
Thaler, R.H. (2005). Advances in Behavioral Finance, Volume II.
Van Rooij, M., Lusardi, A., & Alessie, R. (2011). Financial literacy and stock market participation. Journal of Financial Economics, 101(2), 449-472.
Walstad, W. B., & Rebeck, K. (2008). The impact of personal finance education delivered in high school and college courses. Financial Services Review, 17(4), 259-276.
Webley, P., & Nyhus, E.K. (2006). Parents’ influence on children’s future orientation and saving. Journal of Economic Psychology, 27(1), 140-164.
Widyawati, I. (2012). Faktor-faktor yang mempengaruhi literasi finansial mahasiswa fakultas ekonomi dan bisnis universitas brawijaya. Assets: Jurnal Akuntansi Dan Pendidikan, 1(1), 89-99.
World Bank Open Data. (2023). Inflation, consumer prices (annual %). https://data.worldbank.org/indicator/FP.CPI.TOTL.ZG
Yuanzhi, L. (2021). The Impact of Herd Behavior on the Chinese Stock Market. Education and Humanities Research, 638, 845-848.
Zhang, J., Zhang, Y., & Zhong, R. (2005). Why do Chinese stock markets crash? International Review of Financial Analysis, 14(1), 100-119.
Baker, M., & Wurgler, J. (2007). Investor sentiment in the stock market. Journal of Economic Perspectives, 21(2), 129-151.
Batty, M., Collins, J. M., & Odders-White, E. (2015). Experimental evidence on the effects of Financial Education on elementary school students’ knowledge, behavior, and attitudes. Journal of Consumer Affairs, 49(1), 69–96. https://doi.org/10.1111/joca.12058
Behrman, J. R., Mitchell, O. S., Soo, C. K., & Bravo, D. (2012). Financial literacy, schooling, and wealth accumulation. NBER Working Paper No. 16452.
Bhatia, S., Chawla, D. and Singh, S. (2021). Determinants of financial literacy of young adults: testing the influence of parents and socio-demographic variables. International Journal of Indian Culture and Business Management, Vol. 22 No. 2, pp. 256-271.
Bikhchandani, S., Hirshleifer, D., & Welch, I. (1992). A theory of fads, fashion, custom, and cultural change as informational cascades. Journal of Political Economy, 100(5), 992-1026.
Bikhchandani, S., Hirshleifer, D., & Welch, I. (1998). Learning from the behavior of others: Conformity, fads, and informational cascades. Journal of Economic Perspectives, 12(3), 151-170.
Calvet, L. E., Campbell, J. Y., & Sodini, P. (2009). Measuring the financial sophistication of households. American Economic Review, 99(2), 393-398.
Chang, E. C., Cheng, J. W., & Khorana, A. (2000). An examination of herd behavior in equity markets: An international perspective. Journal of Banking & Finance, 24(10), 1651-1679.
Chawla, D., Bhatia, S., & Singh, S. (2022). Parental influence, financial literacy and investment behaviour of young adults. Journal of Indian Business Research, 14(4), 520–539. https://doi.org/10.1108/jibr-10-2021-0357
Chiang, T. C., Liu, M. H., & Chang, C. L. (2006). The impact of monetary policy on Taiwan stock market. Physica A: Statistical Mechanics and its Applications, 363(2), 539-550.
Chin, W. W. (1998). The partial least squares approach for structural equation modeling. In G. A. Marcoulides (Ed.), Modern methods for business research (pp. 295–336). Lawrence Erlbaum Associates Publishers.
Cipriani, M., Guarino, A., & Guazzarotti, G. (2014). Herding, a-synchronous updating and heterogeneity in memory in a CBS. Journal of Economic Behavior & Organization, 107, 153-180.
Danes, S.M., & Haberman, H. (2007). Teen financial knowledge, self-efficacy, and behavior: a gendered view. Journal of Financial Counseling and Planning, 18(2), 48-60.
Devenow, A., & Welch, I. (1996). Rational herding in financial economics. European Economic Review, 40(3–5), 603–615. https://doi.org/10.1016/0014-2921(95)00073-9
Dewi, M. I. B. L., & Wiagustini, N. L. P. (2022). STUDI FAKTOR YANG MEMENGARUHI PENGAMBILAN KEPUTUSAN INVESTASI SAHAM PADA INVESTOR DI KOTA DENPASAR. BULETIN STUDI EKONOMI, 27, 79–100. https://ojs.unud.ac.id/index.php/bse/index
Feng, L., Seasholes, M. S., & Yang, N. (2009). Does Investor Misvaluation Drive the Takeover Market? Journal of Finance, 64(6), 2515-2547.
Fernandes, D., Lynch Jr, J. G., & Netemeyer, R. G. (2014). Financial literacy, financial education, and downstream financial behaviors. Management Science, 60(8), 1861-1883.
Guiso, L., & Jappelli, T. (2013). Awareness and stock market participation. The Review of Financial Studies, 26(12), 2974-3016.
Gudmunson, C.G. and Danes, S.M. (2011). Family financial socialization: theory and critical review. Journal of Family and Economic Issues, Vol. 32 No. 4, pp. 644-667.
Hair, J. F., Risher, J. J., Sarstedt, M., & Ringle, C. M. (2019). When to use and how to report the results of PLS-SEM. European Business Review, 31(1), 2–24. https://doi.org/10.1108/ebr-11-2018-0203
Hair, J. F., Hult, G. T., Ringle, C. M., Sarstedt, M., Danks, N. P., & Ray, S. (2021). Partial least squares structural equation modeling (PLS-SEM) using R. Classroom Companion: Business. https://doi.org/10.1007/978-3-030-80519-7
Hastings, J. S., & Mitchell, O. S. (2011). How financial literacy and impatience shape retirement wealth and investment behaviors. NBER Working Paper No. 16740.
Hastings, J. S., & Mitchell, O. S. (2013). How financial literacy and impatience shape retirement wealth and investment behaviors. NBER Working Paper No. 16740.
Hira, T. K., & Mugenda, O. (2000). The relationships between perceived parental behaviors and college students' financial satisfaction. Family and Consumer Sciences Research Journal, 28(4), 396-418.
Hung, A. A., Parker, A. M., & Yoong, J. K. (2009). Defining and Measuring Financial Literacy. RAND Labor and Population Working Paper WR-708.
Hwang, S., & Salmon, J. (2004). Herding behavior in Korean capital markets. Pacific-Basin Finance Journal, 12(5), 590-610.
Jorgensen, B.L. and Savla, J. (2010). Financial literacy of young adults: the importance of parental socialization. Family Relations, Vol. 59 No. 4, pp. 465-478.
Kim, J., & Chatterjee, S. (2013). Childhood financial socialization and young adults’ financial management. Journal of Financial Counseling and Planning, 24(1), 61-79.
Kim, J.H. (2015). Parental influence on young adult children’s financial attitudes: moderation effect of financial communication and family environments. ETD collection for University of Nebraska – Lincoln. AAI3738523. Available at: https://digitalcommons.unl.edu/dissertations/AAI3738523
Kimiyaghalam, F., & Yap, S. (2017). Level of financial literacy in Malaysia. International Journal of Research, 4(7), 1065-1074.
KSEI (2022, July 19). Didominasi Milenial dan Gen Z, Jumlah Investor Saham Tembus 4 Juta [berita pers]. https://www.ksei.co.id/files/uploads/press_releases/press_file/id-id/208_berita_pers_didominasi_milenial_dan_gen_z_jumlah_investor_saham_tembus_4_juta_20220725182203.pdf
Kurniasari, I., Sumiati., & Ratnawati, K. (2023). Does parent behavior influence children financial behavior? Journal of International Conference Proceedings, 6(1), 376-384.
Lakonishok, J., Shleifer, A., & Vishny, R. W. (1992). The impact of institutional trading on stock prices. Journal of Financial Economics, 32(1), 23-43.
Lachowicz, M., Preacher, K. J., & Kelley, K. (2018). A novel measure of effect size for mediation analysis. Psychological Methods, 23(2), 244–261. https://doi.org/10.1037/met0000165
Lusardi, A. and Mitchell, O.S. (2007). Baby boomer retirement security: the roles of planning, financial literacy, and housing wealth. Journal of Monetary Economics, Vol. 54 No. 1, pp. 205-224.
Lusardi, A., & Mitchell, O. S. (2008). Planning and financial literacy: How do women fare? American Economic Review: Papers & Proceedings, 98(2), 413-417.
Mankiw, N.G. (2021). Macroeconomics. Macmillan Higher Education.
Montier, J. (2007). Behavioural investing: A Practitioner’s Guide to Applying Behavioural Finance. John Wiley & Sons.
Robb, C. A., & Woodyard, A. S. (2011). Financial knowledge and best practice behavior. Journal of Financial Counseling and Planning, 22(1), 60-70.
Sarstedt, M., Ringle, C. M., & Hair, J. F. (2021). Partial least squares structural equation modeling. In Springer eBooks (pp. 1–47). https://doi.org/10.1007/978-3-319-05542-8_15-2
Shim, S., Barber, B.L., Card, N.A., Xiao, J.J., & Serido, J. (2010). Financial socialization of first-year college students: the roles of parents, work, and education. Journal of Youth and Adolescence, 39(12), 1457-1470.
Soroukou, C.F., & Weissbrod, C.S. (2005). Men and women’s attachment and contact patterns with parents during the first year of college. Journal of Youth and Adolescence, 34, 221-228.
Tamara, D., Arianto, A. Y., Marzuki, E., & Zulhamdani. (2022). The Effect of Financial Literacy, Herding Behavior and Risk Tolerance on Investment Decisions. Budapest International Research and Critics Institute Journal, 5, 30259–30271. https://www.bircu-journal.com/index.php/birci
Thaler, R.H. (2005). Advances in Behavioral Finance, Volume II.
Van Rooij, M., Lusardi, A., & Alessie, R. (2011). Financial literacy and stock market participation. Journal of Financial Economics, 101(2), 449-472.
Walstad, W. B., & Rebeck, K. (2008). The impact of personal finance education delivered in high school and college courses. Financial Services Review, 17(4), 259-276.
Webley, P., & Nyhus, E.K. (2006). Parents’ influence on children’s future orientation and saving. Journal of Economic Psychology, 27(1), 140-164.
Widyawati, I. (2012). Faktor-faktor yang mempengaruhi literasi finansial mahasiswa fakultas ekonomi dan bisnis universitas brawijaya. Assets: Jurnal Akuntansi Dan Pendidikan, 1(1), 89-99.
World Bank Open Data. (2023). Inflation, consumer prices (annual %). https://data.worldbank.org/indicator/FP.CPI.TOTL.ZG
Yuanzhi, L. (2021). The Impact of Herd Behavior on the Chinese Stock Market. Education and Humanities Research, 638, 845-848.
Zhang, J., Zhang, Y., & Zhong, R. (2005). Why do Chinese stock markets crash? International Review of Financial Analysis, 14(1), 100-119.
Published
2023-12-08
How to Cite
SENTOSA, Keivo Yakana Kanaka; GOSAL, Gladys Greselda.
Exploring the Influence of Parental Financial Behavior, Financial Literacy, and Herding Behavior on Investment Behavior Among Generation Z Investors.
SAR (Soedirman Accounting Review) : Journal of Accounting and Business, [S.l.], v. 8, n. 2, p. 192 - 205, dec. 2023.
ISSN 2598-0718.
Available at: <https://jos.unsoed.ac.id/index.php/sar/article/view/10241>. Date accessed: 14 mar. 2025.
doi: https://doi.org/10.32424/1.sar.2023.8.2.10241.
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Articles
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