IMPACT OF RISK PERCEPTION ON INVESTMENT BEHAVIOR, AND MODERATING ROLE OF EMOTIONAL INTELLIGENCE MODERATING ROLE OF EMOTIONAL INTELLIGENCE

Abstract

There is a recent trend of studying human behavior in every field of life and finance is no exception; hence, this study analyzes the impact of risk perception on the investment behavior of individual investors while taking emotional intelligence as a moderator. We hypothesize that risk perception (RP) has an impact on investment behavior (IB) (H1) and emotional intelligence acts as a moderator between RP and IB (H2). Primary data has been used for this study which is collected through questionnaires using convenient sampling. The sample
consisted of 154 usable responses. The questionnaire was checked for reliability and validity using exploratory factor analysis (EFA) and confirmatory factor analysis (CFA). Preacher and Hayes regression was used to test the hypothesis. The research findings indicate a positive and significant relation between risk perception and investment behavior hence hypothesis H1 was accepted. Furthermore, results do not indicate any significant impact of emotional intelligence as a moderator on the investment behavior, hence H2 is rejected. The control variables also do not show any significant impact. Although this study does not show any significant impact of emotional intelligence as a moderator between risk perception and investment behavior but it gives orientation to further study the dimension of emotional intelligence in relation to individual investment behavior.