In the present investigation, I captured cumulative psychosocial resources by generating a composite dimension of Enterprising personality summing the dichotomous indicators of achievement motivation, risk-taking, self-efficacy, self-control, and optimism. Similarly, I captured three more composite dimensions: Intuition, Education and knowledge, and Socio-cultural norms to capture further attributes and resources. These were: risk-appetite, contention (overconfidence), market awareness, operational skills, academic education, ethnicity (origin), and perception on the SPX. All these dimensions showed positive significant association with Investor inclination towards Stock market participation.
This study had three main objectives. First to confirm the hypothesized theoretical framework with different dimensions of the investment inclination (IIN), and then to test this model in the Fijian context using relevant exogenous variables. This study also revealed that four latent factors (Intuition, Education and knowledge, Sociocultural norms, and Enterprising personality (ENP)) are distinct dimensions of investment inclination together with the maturity factor (Age) towards stock market participation.
In general, the results of the study supported the hypothesized model which showed that enterprising personality mediates the influence of individual characteristics on investors’ inclination to invest which, in turn, influences stock market participation. Overall, the study provided useful findings about the role of individual characteristics and personal resources influencing investment in stocks, which may have important implications for financial policy and programme planners in Fiji context.
The present study has used quantitative techniques to analyse the data such as SEM which allowed us to account for the measurement errors of the responses. Also, I have used several fit indices to evaluate the hypothesized model. This has enhanced the quality of estimated parameters and provided statistically more convincing results (Bollen 1989). I believe that this methodical framework can also be used to discover the influential factors of investment inclination and then estimate the predictors of stock market investments in other developing countries with similar socioeconomic contexts.
This study emphasized the importance of individual characteristics affecting the propensity to participate in stock markets and documented the association between investment inclination and actual investments in stocks. Moreover, I explored the significance and estimated the impact of the role played by the enterprising personality, as a mediator between the investment inclination and individual characteristics such as intuition, knowledge and education, and sociocultural norms. Further, this study revealed that maturity represented by age plays a vital role in inclining investors towards stock market participation. Overall, this study not only incorporated many influential individual characteristics into the research model and showed their impact on investment inclination, but also revealed the impact of such investment inclinations on making actual investments in stocks.
The findings will be useful for financial service providers, mainly stockbrokers, who need to attract more clients by designing educational programs to match different levels of maturity and knowledge and education. For regulators, the findings are useful for creating awareness and promotional programs to enhance enterprising personality qualities amongst the general public. The findings also suggest that having a positive attitude towards the SPX is important if people are to participate in the stock market, and those attitudes, beliefs and perceptions might have to be inculcated from an early age through high school curriculums and mass awareness programs.
The present study has several limitations. First, the sample size is relatively small; it would need to be larger to yield more statistical power. Second, respondents with more diverse backgrounds and from diverse geographical areas would have increased the generalizability of the study findings. Third, greater numbers of questionnaire items would have produced higher reliability of factors reflecting different dimensions. Future studies should test this theoretical framework with a larger and more diverse sample, and with a more comprehensive instrument. This research can also be taken further by studying the causal or mutually integrative relationship between stock market participation and stock market development for future research.
Despite these limitations, the current study enhanced our knowledge about the assessment of investment inclination and its underpinning influential factors in the Fijian context. The study findings indicated diverse influences of Intuition, Educations and knowledge, and Sociocultural norms on investment inclination through enterprising personality which directly influence investment inclination towards investment behavior (stock market participation) in the South Pacific Stock market. Further, there was also evidence that individuals’ maturity (the Age factor) has a direct effect on triggering stock market participation.
There are currently no studies available about the motivating factors of individual investor participation in the South Pacific Stock Market to the best of our knowledge. This study investigates the motivating factors of existing and potential stock market investors in Fiji.