The Effect of Islamic Financial Literacy, Return Perception, and Risk Perception on Investment Decisions in Sharia Stocks with Experienced Regret as a Moderation Variable (Case Study on the Indonesian Muslim Merchants Association)
DOI:
https://doi.org/10.70550/ecif.v2i1.101Keywords:
Islamic Financial Literacy, Return Perception, Risk Perception, Investment Decision, Experienced RegretAbstract
This study aims to identify the influence of Islamic financial literacy, return perception, and risk perception on investment decisions by involving experienced regret as a moderating variable. This research is a quantitative research whose data source comes from questionnaires distributed to 100 ISMI members. The data were analyzed using partial least square technique with the help of SMARTPLS 3 software. The results showed that Islamic financial literacy, return perception, and risk perception have a positive and significant effect on investment decisions. In addition, there is a moderating role of experienced regret in strengthening the influence of Islamic financial literacy, return perception, and risk perception on investment decisions.
Downloads
References
Abdullah, A., & Jalil, M. (2022). Cultural influences on investment decisions in Islamic finance. International Journal of Economics and Finance.
Addury, M. M., Nugroho, A. P., & Khalid, S. (2020). The Intention of Investing Sharia Stocks on Millennials: The Role of Sharia Financial Literacy. Ihtifaz: Journal of Islamic Economics, Finance, and Banking, 3(2), 89-105.
Ahmad, M., & Shah, S. Z. A. (2022). Overconfidence heuristic-driven bias in investment decision-making and performance: Mediating effects of Risk perception and moderating effects of financial literacy. Journal of Economic and Administrative Sciences, 38(1), 60-90.
Albaity, M., & Rahman, M. (2019). The role of awareness, knowledge, and information on Islamic financial literacy. Journal of Islamic Marketing.
Alfiansyah, A., & Rahmawati, E. (2022). Socioeconomic factors affecting investment decisions in Islamic finance. Journal of Islamic Financial Studies.
Ali, A., & Rahman, M. M. (2022). The impact of financial literacy on investment decision-making: A case study of investors in Pakistan. Journal of Financial Education, 48(1), 1-15.
Amiruddin, M. (2021). Islamic financial literacy and investment decision-making: A study on Muslim investors. Islamic Finance Journal, 8(2), 45-60.
Arif, M., & Awan, H. M. (2022). Financial literacy, Risk perception, and investment decision-making: Evidence from small investors in Pakistan. International Journal of Finance & Banking Studies, 11(1), 1-14.
Asad, M., et al. (2021). Behavioral finance and the role of religion in investment decisions: An Islamic perspective. Journal of Behavioral Finance.
Azhar, R., & Yusuf, I. (2021). Barriers to Islamic financial literacy and participation in Sharia-compliant investments. Journal of Islamic Economics, 12(1), 89-104.
Azizah, N., & Tamanni, S. (2023). Investment decisions in Islamic mutual funds: Exploring the role of financial literacy, Risk perception, and perceived benefits. Journal of Islamic Financial Studies, 12(3), 45-62.
Baiq Fitri Arianti, & Khoirunnisa Azzahra. (2020). Faktor-Faktor Yang Mempengaruhi Literasi Keuangan: Studi Kasus UMKM Kota Tangerang Selatan. Jurnal Manajemen dan Keuangan, 9(2), 156–171.
Baker, H. K., & Nofsinger, J. R. (2010). Psychology and investment decisions. John Wiley & Sons.
Bedi, H. S., Karn, A. K., Kaur, G. P., & Duggal, R. (2019). Financial Literacy – A Bibliometric Analysis. Our Heritage, 67(10), 1042–1054.
Bollani, L., & Chmet, F. (2020). Bibliometric Analysis of Islamic Finance. Islamic Finance Review, 1-11.
Creswell, J. W. (2014). Research Design: Qualitative, Quantitative, and Mixed Methods Approaches. SAGE Publications.
Fadhilah, S., & Rahmat, H. (2023). The impact of Islamic financial literacy on investment behavior among young investors. Islamic Economic Review, 10(3), 67-85.
Farahani, H. A., & Saman, J. A. (2020). The influence of religiosity on financial decision-making. Journal of Islamic Finance.
Farhan, N. (2022). Developing a strong Islamic financial literacy framework: A strategy for increasing participation in Islamic capital markets. Islamic Finance Research Journal, 9(4), 121-138.
Firdaus, A., Ramli, M., & Hadi, S. (2022). Transparency and Islamic financial literacy: A pathway to increasing investor confidence. Journal of Sharia Finance, 7(3), 55-72.
Forlani, D., & Mullins, J. W. (2000). Perceived risk and the investment decision process: The case of venture capitalists. Entrepreneurship Theory and Practice, 24(2), 35-49.
Goyal, K., & Kumar, S. (2020). Financial Literacy: A Systematic Review and Bibliometric Analysis. International Journal of Consumer Studies Wiley, 45(1), 80–105.
Hakim, Z., & Rahman, L. (2023). The role of investment experience in enhancing Islamic financial literacy among investors. Journal of Islamic Banking & Finance, 11(2), 34-50.
Halim, M. (2023). Consumer behavior theory and Islamic stock investments: Economic and social factors influencing decisions. Journal of Behavioral Economics, 24(1), 78-92.
Hamid, A. H., & Alamsyah, A. (2022). Trust in Islamic financial institutions and investment decisions: The moderating role of religiosity. International Journal of Islamic Finance.
Hasan, R. (2021). Understanding Islamic financial principles: A key to improving financial literacy among Muslim investors. Islamic Finance Quarterly, 6(2), 78-92.
Hassan, M., & Karim, A. (2022). Risk perception and Islamic financial literacy: How knowledge influences investment decisions. Journal of Financial Behavior, 15(1), 101-117.
Hassan, S., & Nur, A. (2023). Collaborative efforts in Islamic financial literacy education: A way forward for sustainable Islamic investments. Journal of Islamic Business Studies, 14(2), 77-95.
Hermawan, A. (2018). Metode Penelitian Kuantitatif: Konsep dan Aplikasi. Jakarta: Erlangga.
Hussain, S., & Ali, A. (2022). The role of financial literacy in investment decisions: A study of seseorangal investors in Pakistan. Journal of Risk and Financial Management, 15(1), 45.
Ibrahim, F., Latif, R., & Wahid, H. (2020). Principles of Islamic financial literacy and their impact on investment decisions. Islamic Economics and Finance Review, 5(1), 112-129.
Ishfaq, M., Bashir, S., & Shaheen, F. (2022). The impact of financial literacy on investment decisions: A comparative study of two emerging economies. International Journal of Financial Research, 13(3), 82-90.
IslamicMarkets. (2022, October 26). Global green and sustainability sukuk issuance reaches USD 4.4 billion in the first half of 2022. IslamicMarkets.com. https://islamicmarkets.com/articles/global-green-and-sustainability-sukuk-issuance-reaches-usd-4-4-billion
IslamicMarkets. (2022, September 29). Green Sukuk market set for take-off as demand grows: IslamicMarkets Research. IslamicMarkets.com. https://islamicmarkets.com/articles/green-sukuk-market-set-for-take-off-as-demand-grows-islamicmarkets
Ismail, K. (2021). Demographic factors influencing Islamic financial literacy: A study on Malaysian investors. Journal of Islamic Finance and Economics, 8(4), 143-158.
Lestari, D. M., et al. (2022). The effect of Islamic financial literacy on investment decisions in Islamic stocks. Journal of Islamic Finance.
Lopes, L. L. (1987). Between hope and fear: The psychology of risk. Advances in Experimental Social Psychology, 20, 255–295. https://doi.org/10.1016/S0065-2601(08)60307-0
Mansur, H., & Hidayat, T. (2022). Confidence in investment decisions: The role of Islamic financial literacy among Muslim investors. Journal of Islamic Investment Studies, 9(3), 66-84.
Miller, M. H., & Modigliani, F. (1961). Dividend Policy, Growth, and the Valuation of Shares. Journal of Business, 34(4), 411-433.
Munawar, A. (2021). The importance of accessible information in fostering Islamic financial literacy. Journal of Economic and Financial Studies, 12(2), 99-116.
Nugroho, A. P., & Apriliana, R. M. (2021). Islamic Financial Literacy and Intention to Use Gopay in Yogyakarta: Extended Theory of Acceptance Models. ICONISSS 2021, 2007(January), 1-12.
Nuraini, N., et al. (2021). Market dynamics and perception of returns in Islamic shares. Journal of Economic Studies.
Omar, M. A., & Rahman, A. A. (2020). Behavioral factors influencing Muslim investors’ decision-making in Malaysia: The mediating role of regret aversion. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3654920
Pieters, R., & Zeelenberg, M. (2005). On the psychology of loss aversion: The moderating effect of responsibility. Organizational Behavior and Human Decision Processes, 97(1), 1–14. https://doi.org/10.1016/j.obhdp.2005.01.001
Putri, W. W., & Hamidi, M. (2022). Perception of returns in Islamic investments: An empirical study. International Journal of Islamic Finance.
Rahim, S. H. A., Rashid, R. A., & Hamed, A. B. (2016). Islamic Financial Literacy and Its Determinants Among University Students: An Exploratory Factor Analysis. International Journal of Economics and Financial Issues, 6(7), 32-35.
Rahmah, L. (2016). Exploring consumer behavior in sharia-compliant investments: Religious compliance and financial considerations. International Journal of Islamic Finance, 11(4), 119-135.
Rahman, A. M., et al. (2020). Shariah-compliant investment behavior and decision-making: An empirical study. Journal of Islamic Finance.
Rahmat, A., Yusuf, M., & Said, B. (2022). Enhancing Islamic financial literacy through structured educational programs. Journal of Islamic Economic Development, 11(4), 67-83.
Ridwan, M. (2023). The role of government initiatives in promoting Islamic financial literacy. Journal of Public Policy in Islamic Finance, 10(1), 33-51.
Rizqia, M., et al. (2021). The moderating effect of religiosity on financial literacy and investment behavior. Journal of Behavioral Finance.
Salim, T., & Wahyudi, F. (2022). Islamic financial education and its effect on investment decision-making. Journal of Islamic Financial Literacy, 6(3), 72-89.
Samsuri, A. (2020). Literasi Keuangan, Toleransi Risiko, Risk perception dan Niat Berinvestasi. Disertasi thesis, Universitas Airlangga.
Sari, D., et al. (2022). Knowledge of Islamic finance and its impact on investment behavior. Indonesian Journal of Islamic Finance.
Seto, A. A. (2017). Financial Literacy and Behavioral Biases in Investment Decision-Making. Journal of Economic Studies, 44(3), 345-360.
Shah, S. A., & Khan, M. (2022). The moderating role of financial literacy on the relationship between Risk perception and investment decisions. Journal of Finance and Investment Analysis, 11(1), 25-35.
Shukla, S., & Singh, A. (2021). Seseorangal investor's perception of investment in financial markets: An empirical study. Journal of Behavioral Finance.
Sindhu, S., & Kumar, M. (2022). The relationship between financial literacy, Risk perception, and investment decisions among seseorangal investors in India. International Journal of Economics and Financial Issues, 12(2), 1-11
Sugiyono. (2017). Metode Penelitian Kuantitatif, Kualitatif, dan R&D. Bandung: Alfabeta.
Sukmawati, A., & Azizah, S. (2021). Factors Affecting the Sharia Investment Intention: A Conceptual Review. Jurnal Ekonomi Syariah, 12(1), 123–145.
Sulaiman, R., & Hakim, L. (2023). The impact of Islamic financial literacy on responsible investment behavior. Journal of Behavioral Finance and Economics, 15(2), 98-115.
Taufik, A., & Hadi, M. (2022). Shariah-compliant investment behavior: The influence of financial literacy and ethical considerations. Journal of Islamic Banking & Investment, 13(1), 54-70.
Wahyuni, S., & Fitriani, R. (2022). The influence of religiosity on Shariah investment decisions: Evidence from Muslim investors. Journal of Islamic Economics and Finance.
Wibowo, A., & Maulida, R. (2022). Perception of risk in Islamic financial products: Evidence from Indonesia. Asian Journal of Business and Accounting.
Zeelenberg, M., & Pieters, R. (2007). A theory of regret regulation 1.0. Journal of Consumer Psychology, 17(1), 3–18. https://doi.org/10.1207/s15327663jcp1701_3
Zhang, Y., & Zheng, L. (2022). Behavioral finance: How financial literacy affects investment decision-making in China. Frontiers in Psychology, 13, 1234.
Zulkifli, M., & Anwar, H. (2023). Islamic financial principles and literacy: A study on investor behavior in Southeast Asia. Journal of Islamic Economic Perspectives, 9(2), 74-90.
Downloads
Published
Issue
Section
License
Copyright (c) 2025 Economics & Islamic Finance Journal (ECIF)
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
