Financial Behaviour and Stock Investment Decisions: Exploring the Role of Dual Process Theory Among Generation Z In East Java

Siti Aisjah; Atim Djazuli; Cicik Retno Wati; Muhammad Fajrul Islam F

doi:10.33005/mebis.v11i1.769

Authors

Siti Aisjah Universitas Brawijaya
Atim Djazuli Universitas Brawijaya
Cicik Retno Wati Politeknik Negeri Jember
Muhammad Fajrul Islam F Universitas Pendidikan Ganesha

DOI:

https://doi.org/10.33005/mebis.v11i1.769

Keywords:

Financial Behavior, Loss Aversion, Investment Decision, Herding Behavior

Abstract

This study examines the influence of financial behaviour, including fear of missing out, financial literacy, herding behaviour, loss aversion, and risk perception, on stock investment decisions among Generation Z in East Java. Utilizing Dual Process Theory as a theoretical framework, this research explores the dynamic interaction between intuitive and analytical thinking processes in shaping investment behaviour. A quantitative approach was employed, with data collected through questionnaires with a Likert scale of 1-5, distributed to 402 Generation Z respondents actively investing in the stock market. Data were analysed using SEM-PLS with SmartPLS 3.3. The results reveal that financial literacy positively impacts herding behaviour and loss aversion, while herding behaviour and loss aversion significantly influence investment decisions. Moreover, fear of missing out and risk perception serve as critical intermediaries, illustrating how emotional and cognitive factors interact in decision making. The findings contribute to a deeper understanding of Generation Z’s investment behaviour, highlighting the significance of balancing intuition and analysis. Practical implications include the need for targeted financial education programs to enhance financial literacy and reduce bias-driven behaviour. This study provides theoretical insights by bridging the dual process theory with financial decision-making, offering a comprehensive framework for understanding stock investment behaviour in emerging markets. Future research could expand this scope by exploring other demographic groups or incorporating additional psychological factors.

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Author Biography

Cicik Retno Wati, Politeknik Negeri Jember

Agribusiness Management

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