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http://dx.doi.org/10.13106/jafeb.2020.vol7.no12.819

Relationship of the Big Five Personality Traits and Risk Aversion with Investment Intention of Individual Investors  

SARWAR, Danish (Department of Management Sciences, Faculty of Management Sciences, Balochistan University of Information Technology Engineering & Management Sciences)
SARWAR, Bilal (Department of Management Sciences, Faculty of Management Sciences, Balochistan University of Information Technology Engineering & Management Sciences)
RAZ, Muhammad Asif (Department of Management Sciences, Faculty of Management Sciences, Balochistan University of Information Technology Engineering & Management Sciences)
KHAN, Hadi Hassan (Department of Management Sciences, Faculty of Management Sciences, Balochistan University of Information Technology Engineering & Management Sciences)
MUHAMMAD, Noor (Department of Management Sciences, Faculty of Management Sciences, Balochistan University of Information Technology Engineering & Management Sciences)
AZHAR, Usman (Department of Economics, Faculty of Management Sciences, Balochistan University of Information Technology Engineering & Management Sciences)
ZAMAN, Nadeem uz (Department of Management Sciences, Faculty of Management Sciences, Balochistan University of Information Technology Engineering & Management Sciences)
KASI, Mumraiz Khan (Department of Computer Science, Faculty of Information and Communication Technology, Balochistan University of Information Technology Engineering & Management Sciences)
Publication Information
The Journal of Asian Finance, Economics and Business / v.7, no.12, 2020 , pp. 819-829 More about this Journal
Abstract
This empirical research is aimed at testing the relationship of the big five personality traits namely openness to experience, extraversion, consciousness, agreeableness, neuroticism, and risk aversion with the investment intention of individual investors belonging to Balochistan, Pakistan. The primary data is collected through a self-administered questionnaire (a structured form that consists of a series of closed-ended and open-ended questions) from a sample of 397 active individual investors belonging to different districts of the province. The data is empirically analyzed by applying the Partial Least Square (PLS) path modeling technique by using the estimation package available in Smart-PLS. The findings of this study suggest that all the variables are statistically significant with investors' investment intention with risk aversion as the strongest predictor. Moreover, openness to experience, extraversion, consciousness, agreeableness, and risk are significantly and positively related to an investor's investment intention, whereas neuroticism is negatively related to an investor's investment intention. The results extended by this study can be used by financial planners and investment bankers to channelize the available financial resources in diversified portfolios. The results will help financial planners to make available diverse investment alternatives for investors in Balochistan, thus catering to their unique needs. Academia must offer courses on contemporary finance paradigm based on behavioral finance to enable future business graduates to make wise financial decisions.
Keywords
Disjoint Two-Stage Analysis; Investment Intention; Personality Traits; PLS Path Modeling;
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