The Impact of Financial Socialization, Cognitive Ability and Self-efficacy on Financial Literacy of Investors in Pakistan

Authors

Muhammad Junaid Khan

Department of Management Sciences, COMSATS University Islamabad, Pakistan

Dr. Faheem Aslam

Assistant Professor, Department of Management Sciences, COMSATS University Islamabad, Pakistan

Syed Nisar Ul Mulk

Department of Management Sciences, University of Sawabi, KP, Pakistan

DOI: https://doi.org/10.35484/pssr.2020(4-I)56

Keywords

Cognitive Ability Financial Behaviour Financial Literacy Financial Socialization Self-Efficacy

Abstract

The purpose of our study is to investigate the impact of financial socialization, cognitive ability and self-efficacy on financial literacy of investors in Pakistan. Data was collected from 429 individual investors and were analyzed with structural equation modeling on Smart PLS software. This study has used convenience sampling technique for the collection of data. The participation of male investors as compare to female investors is high in Pakistan stock market. The main results of our study exhibit that self-efficacy and cognitive ability positively influences financial literacy of investors, while financial socialization has no impact on financial literacy. Policy makers can use this study to make some policies to reduce gender gap of investor in stock market of Pakistan