How does risk aversion shape investors’ intentions? Evidence from the Indian corporate bond market

  • 100 Views
  • 27 Downloads

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License

Risk aversion plays a crucial role in understanding how individuals make financial decisions and allocate their resources. This study analyzes the influence of risk aversion on behavioral intentions and explores the mediating role of attitudes, subjective norms, and perceived behavioral control. Additionally, it investigates the moderating effect of gender and financial literacy on behavioral intentions of investors. A sample of 400 people was collected from Indian retail investors by administering a structured questionnaire through stock brokering firms, and data were analyzed using Partial least squares – Structural equation modelling in the Smart PLS 3.3.9 software. The research found that risk aversion, attitude, subjective norms, and perceived behavioral control significantly impact an investor’s intention. Among all the antecedents of behavioral intentions, perceived behavioral control (β 0.481*) was found as a significant predictor of the intention compared to attitude (β 0.154*), subjective norms (β 0.224*) and risk aversion (β 0.082*) factors. Further, mediation analysis found that attitude, subjective norms, and perceived behavioral control partially mediated the relationship between risk aversion and intention. Lastly, the multi-group analysis revealed that gender and financial literacy did not moderate the association between risk aversion and intention.

view full abstract hide full abstract
    • Figure 1. Conceptual framework
    • Table 1. Details of respondents’ profile
    • Table 2. Results of the measurement model
    • Table 3. Fornell-Larcker criterion results
    • Table 4. Heterotrait-Monotrait ratio (HTMT ratio) results
    • Table 5. Results of the structural model
    • Table 6. Results of mediation analysis
    • Table 7. Results of MICOM (Gender)
    • Table 8. Results of MICOM (Financial literacy)
    • Table 9. Results of MGA (Gender)
    • Table 10. Results of MGA (Financial literacy)
    • Table А1. List of measurement scales
    • Conceptualization
      Geetha E., Rajeev Matha, Venisha Jenifer Dmello
    • Methodology
      Geetha E., Rajeev Matha
    • Validation
      Geetha E., Kishore L.
    • Writing – review & editing
      Geetha E., Kishore L., Venisha Jenifer Dmello
    • Data curation
      Rajeev Matha, Kishore L., Venisha Jenifer Dmello
    • Formal Analysis
      Rajeev Matha, Venisha Jenifer Dmello
    • Investigation
      Rajeev Matha, Kishore L.
    • Software
      Rajeev Matha
    • Writing – original draft
      Rajeev Matha