Exploring the roles of financial literacy, past behavior, and subjective norms in shaping investment intention: A mediation analysis

Type of the article: Research ArticleAbstractAn individual’s intention to invest reflects their inclination to explore diverse investment instruments, allocate time to understand investment mechanisms through activities such as seminars or workshops, and actively participate in investment practices. This issue is particularly relevant, given the relatively low levels of financial literacy and investment participation among the public, especially Generation Z. The present study aims to examine the influence of financial literacy, prior behavioral experience, and subjective norms on investment intention among Generation Z in North Sumatra, Indonesia, both directly and indirectly through perceived behavioral control. Respondents comprised students and employees identified as Generation Z, selected using purposive and snowball sampling techniques, with data collected via online questionnaires. A quantitative approach was employed, and data were analyzed using Structural Equation Modeling with Partial Least Squares (PLS) version 4.0. The results demonstrate that financial literacy has a significant positive impact on both investment intention (p < 0.05) and perceived behavioral control (p < 0.05). Furthermore, perceived behavioral control, previous experience, and subjective norms significantly influence investment intention (p < 0.05). Mediation analysis reveals that perceived behavioral control plays a notable mediating role in the relationship between financial literacy and investment intention (p < 0.05). These findings emphasize the need to enhance financial literacy, strengthen investment communities, and deliver targeted training to build Generation Z’s confidence in investing, thereby fostering their investment intentions strategically and sustainably.