The Effect of Financial Literacy, Risk Aversion, Risk Tolerance, and Investment Knowledge on Investment Decisions with Locus of Control as a Moderating Variable (Case Study: Accounting Students in Jakarta)
DOI:
https://doi.org/10.35870/emt.v9i4.4625Keywords:
Financial Literacy, Risk Tolerance, Investment Knowledge, Locus of Control, Investment DecisionAbstract
Student investment decisions are influenced by a complexity of cognitive and psychological factors that require in-depth understanding to optimize financial decision making. This study aims to examine the effect of financial literacy, risk aversion, risk tolerance, and investment knowledge on accounting students' investment decisions moderated by locus of control. The research sample consisted of 150 respondents, with data collected through questionnaires and analyzed using Structural Equation Modeling (SEM) based on SmartPLS version 4.0. The results show that the four independent variables have a significant effect on investment decisions. Locus of control is able to moderate the relationship between financial literacy and investment knowledge on investment decisions, but does not moderate the relationship between risk aversion and risk tolerance. The R-square value of 0.944 indicates a very high model strength in explaining the dependent variable. Practical implications include strengthening students' financial literacy and developing investment training based on self-confidence and internal control.
Downloads
References
Adil, M., Singh, Y., & Ansari, M. S. (2022). How does financial literacy moderate the association between behavioral biases and investment decision? Asian Journal of Accounting Research, 7(1), 17-30. https://doi.org/10.1108/AJAR-09-2020-0086.
Al Qoriana, V., & Noerman Ningtyas, M. (2024). Financial literacy, financial attitudes, and the environment on investment decisions through investment intention. Indonesia Interdisciplinary Journal of Sharia Economics (IIJSE), 7(2), 3049-3064.
Amanda, Bambang Widagdo, & Fika Fitriasari. (2023). The effect of financial literacy, personal income, and locus of control in long-term gold investment decision. Jamanika (Journal of Business Management and Entrepreneurship), 3(02), 120-129. https://doi.org/10.22219/jamanika.v3i02.25502.
Besri, A. A. O., Husni, T., & Rahim, R. (2023). The effect of financial literacy, religiousness, investment knowledge on investment decision-making through investment intention as an intervening variable. Journal of Business Economics Informatics, 5, 1350-1354. https://doi.org/10.37034/infeb.v5i4.690.
Budiman, J., Yodiputra, J., & Agustin, I. N. (2025). How overconfidence and mental accounting influence investments? The moderating role of financial literacy. 5(1), 1-18.
Fitra, H., Rasyid, R., & Susanti, Y. (2018). The influence of locus of control and financial knowledge on employee investing decisions at PT Pertamina (Persero) Branch of Padang. 57(Piceeba), 174–184. https://doi.org/10.2991/piceeba-18.2018.45.
Hari Ashari. (2024). The effect of financial literacy, perception of risk, and locus of control on investment decisions (case study on employees in Padang City). Web-based Sales and Order Management System at Bumdes Lestari Jaya, 2(1), 33-42.
Hidayat, T., Oktaviano, B., & Baharuddin, R. (2023). Investment decision based on financial literacy, investment knowledge, and risk perception. Journal of Science and Social Research, 2 (June), 441-452.
Hidayat, V. E., & Pamungkas, A. S. (2022). The effect of financial literacy, risk perception, and risk tolerance on investment decisions in stocks. Journal of Managerial and Entrepreneurship, 4(3), 767-776. https://doi.org/10.24912/jmk.v4i3.19771.
Juwono, A., Carmelite, F., Tan, A., Sudarsono, J. E., & Anastasia, N. (2025). Risk tolerance and risky investment intention among university students: The role of financial literacy as a moderating variable. 5(1), 13-25.
Lestari, M., Pangestuti, D. C., & Fadila, A. (2022). Analysis of financial literacy, income, and risk perception on investment decisions and financial behavior as an intervening variable. Accuracy, 33(4), 1-14. https://doi.org/10.36407/akurasi.v4i1.602.
Putri, P. T., & Simanjuntak, M. (2020). The role of motivation, locus of control, and financial literacy on women’s investment decisions across generations. Journal of Consumer Sciences, 5(2), 102-123. https://doi.org/10.29244/jcs.5.2.102-123.
Putrie, S. G. S., & Usman, B. (2022). The effect of financial literacy and risk avoidance on investment decisions with locus of control as a moderating variable in DKI Jakarta. Scientific Journal of Business Management and Innovation of Sam Ratulangi University (JMBI Unsrat), 9(2), 703-722.
Ratnadi, N. M. D., Widanaputra, A. A. G. P., & Putra, I. N. W. A. (2020). Behavioral factors influencing investment decision-making by college students: An empirical study in Bali Province, Indonesia. International Journal of Scientific and Technology Research, 9(2), 1358-1368.
Salsabila, R. T., Arifin, A., & Surakarta, U. M. (2024). The effect of herding behavior, overconfidence, and risk tolerance on investment decisions with financial literacy as a moderating variable: Case study on students of the Faculty of Economics and Business, University of Muhammadiyah Surakarta. Journal of Bina Bangsa Ekonoomika, 17(1), 524-539.
Siregar, C. P., Putrie, S. G. S., & Leon, F. M. (2022). The effect of financial bias behavior on investment decisions with financial literacy as a moderating variable in Jabodetabek. JMBI, 9(1), 431-449.
Susanti, W. K. (2021). The effect of financial literacy, risk tolerance, experience regret, and herding on investment decisions for students in Banyumas Regency. Jumka Journal, 1(1), 49-58.
Widiastuti, Soleha, E., Zakiatul Hidayah, Z., & Meirani, N. (2024). Analysis of risk tolerance and overconfidence on investment decisions on the Indonesia Stock Exchange. Journal of Economic Education and Entrepreneurship, 8(1), 263. https://doi.org/10.29408/jpek.v8i1.25274.
Yuwono, W. (2023). The effect of overconfidence, herding, availability bias, risk aversion, and personal information on investment decisions. MANOR: Journal of Management and Organization Review, 5(2), 1-10. https://doi.org/10.47354/mjov5il.
Downloads
Published
Issue
Section
License
Copyright (c) 2025 Dessy Retani Gunawan Putri, Amin Wijoyo
This work is licensed under a Creative Commons Attribution 4.0 International License.
Authors who publish with this journal agree to the following terms:
1. Copyright Retention and Open Access License
Authors retain copyright of their work and grant the journal non-exclusive right of first publication under the Creative Commons Attribution 4.0 International License (CC BY 4.0).
This license allows unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
2. Rights Granted Under CC BY 4.0
Under this license, readers are free to:
- Share — copy and redistribute the material in any medium or format
- Adapt — remix, transform, and build upon the material for any purpose, including commercial use
- No additional restrictions — the licensor cannot revoke these freedoms as long as license terms are followed
3. Attribution Requirements
All uses must include:
- Proper citation of the original work
- Link to the Creative Commons license
- Indication if changes were made to the original work
- No suggestion that the licensor endorses the user or their use
4. Additional Distribution Rights
Authors may:
- Deposit the published version in institutional repositories
- Share through academic social networks
- Include in books, monographs, or other publications
- Post on personal or institutional websites
Requirement: All additional distributions must maintain the CC BY 4.0 license and proper attribution.
5. Self-Archiving and Pre-Print Sharing
Authors are encouraged to:
- Share pre-prints and post-prints online
- Deposit in subject-specific repositories (e.g., arXiv, bioRxiv)
- Engage in scholarly communication throughout the publication process
6. Open Access Commitment
This journal provides immediate open access to all content, supporting the global exchange of knowledge without financial, legal, or technical barriers.
