Financial literacy as a driver of investment intentions: a study using the theory of planned behaviour

Purpose This research seeks to investigate the impact of financial literacy and assess the applicability of the Theory of Planned Behaviour (TPB) in the decision-making process of individual real estate investors. Design/methodology/approach The conceptualized research model was empirically tested using primary data from 310 real estate investors. The study is quantitative and utilizes Partial Least Squares Structural Equation Modelling (PLS-SEM) to examine the hypothesis. Findings The findings reveal that financial literacy significantly influences the constructs of TPB, with all of them influencing investment intention except interpersonal influence. Although financial literacy doesn't directly influence investment intention, the mediation analysis shows that attitude, perceived behavioural control and external influence mediate this relationship. Research limitations/implications The study is administered in India, utilizing cross-sectional data. Future studies can use longitudinal data and a different geographical area to widen the scope of the study. Practical implications The study's findings can guide policymakers at both regulatory and advisory ends in utilizing the tool of financial literacy through mandatory courses in education or knowledge transfer seminars to boost investor confidence, participation and engagement while relying less on word-of-mouth publicity. Originality/value This study is distinctive in examining the impact of financial literacy on decision-making about real estate investments, an area that is still in its early stages of inquiry. This research expands on the significance of TPB components in understanding intentions by examining their role as mediators in the connection between financial literacy and investment intention.