Advancing informal investing: how psychological traits shape the intentions of emerging micro-angel investors

Purpose This study explores the factors influencing informal investment intention among future investors, particularly MBA students in India. It aims to identify key psychological, social and cognitive traits that affect investment behavior, contributing to a better understanding of informal investment dynamics in emerging economies. Design/methodology/approach The study adopted a survey approach, utilizing an expert-validated questionnaire. Data were collected from 388 students across multiple institutions. Structural equation modeling (SEM) and artificial neural networks (ANN) were used to analyze the relationships between traits like self-efficacy, subjective norms, risk propensity and entrepreneurial alertness. Findings Self-efficacy, subjective norms and entrepreneurial alertness were found to significantly influence informal investment intention. Mediation analysis revealed partial mediation by entrepreneurial alertness, while ANN results ranked self-efficacy as the most important predictor. Regulatory focus showed no significant effect. Research limitations/implications The study is limited to a student sample in India, which may not fully represent the broader population of potential informal investors. Future research could explore diverse demographic groups and longitudinal data to validate and extend these findings. Practical implications The findings suggest that enhancing self-efficacy and fostering positive subjective norms could encourage informal investment. Policymakers and educational institutions can use these insights to design targeted programs promoting entrepreneurial behavior and financial inclusion. Originality/value This study offers unprecedented insights into informal investment behavior by integrating cognitive and personality traits with behavioral intentions, providing a comprehensive framework for understanding the factors that influence informal investment in emerging markets.