Digital stock trading behavioural intention in Indonesia: moderating effect of risk perception, financial literacy, digital literacy, and trust

Abstract

The rapid development in digitisation and cellular technology has been changing the stock trading landscape. However, the emergence of digital stock trading platforms (DSTP) in Indonesia has not increased the involvement of individual investors in its stock market, which remain low at 1.6% of the total population. Many Indonesians are unfamiliar with the DSTP despite its technology-wide development. Thus, this study is essential to determine the factors that can increase the participation of potential investors in the stock market by focusing on the factors that influence behavioural intentions (BI) in adopting DSTP. This study relies on the Unified Theory of Acceptance and Use of Technology 2 (UTAUT2), which is augmented with four additional dimensions, namely, risk perception, financial literacy, digital literacy, and trust (henceforth, UTAUT2 augmenters), to explain behavioural intentions of potential investors to adopt DSTP. In addition, this study also focuses on the role of UTAUT2 augmenters as moderators in the relationship between UTAUT2 dimensions and behavioural intention. This study utilised survey data from 666 potential investor respondents and employed the Structural Equation Modeling-Analysis of Moment Structures (SEM-AMOS) for data analysis. The results of this study confirm the existence of a significant and positive effect of the UTAUT2 dimension on behavioural intention, except for two factors that are facilitating conditions and habits. For the UTAUT2 augmenters, the findings are: 1) risk perception has a negative impact on BI and moderates the relationships between effort expectancy, hedonic motivation, habits, and BI; 2) financial literacy has a positive effect on BI but also strengthens the relationship between effort expectancy, price values, facilitating conditions, and BI; 3) digital literacy has positive effect on BI and moderates the relationship between the significant effects of performance expectancy, effort expectancy, social influence, hedonic motivation, price value, and BI; and 4) trust has positive effect on BI and also strengthens the relationship between hedonic motivation, habits, and BI. The findings of this study have an academic contribution, namely to information management knowledge and behavioural finance literature. These findings emphasise the importance of the UTAUT2 dimension in determining behavioural intentions. More importantly, these findings confirm that UTAUT2 augmenters influence behavioural intentions directly and as moderators. The research findings have management and policy implications. First, the government's aim at optimising digitalisation to increase the involvement of retail investors in the stock market would require financial institutions' cooperation to improve the community's financial and digital literacy, especially potential investors. Indonesian authorities should integrate financial and digital literacy into the National education curriculum. DSTP platform providers must implement policies that protect investors, maintain user trust, and comply with regulations to make users feel safe investing in DSTP.