Investment in the Digital Era: The Influence of Digital Social Influence and Behavioral Finance on Generation Z’s Investment Decisions

Generation Z has grown up alongside digital technology, social media, and online investment applications, resulting in investment behaviors that differ from those of previous generations. This study aims to analyze the influence of Digital Social Influence and Behavioral Finance on Generation Z's Investment Decisions, with Financial Literacy as a moderating variable. Data were collected from 125 Gen Z respondents in Denpasar who possess a Single Investor Identification (SID) and have been actively investing in stocks for at least two years. A Likert scale questionnaire (1–10) was used, and the data were analyzed using Structural Equation Modeling with Partial Least Squares (SEM-PLS).The results show that Digital Social Influence significantly affects both Behavioral Finance and Investment Decisions. Additionally, Behavioral Finance has a positive influence on Investment Decisions. Furthermore, Financial Literacy strengthens the quality of investment decisions by mitigating excessive behavioral biases. These findings highlight the importance of enhancing financial literacy among the younger generation to foster critical thinking toward digital information and enable rational investment decision-making. For regulators and capital market participants, the results of this study can serve as a basis for formulating effective, digitally-based educational strategies tailored to the characteristics of Generation Z.