Effect of emotional intelligence personality traits and financial literacy on investment intention

Abstract

This study examines the psychological and financial antecedents that shape equity investment intention among potential retail investors in Bengaluru, India. In a developing economy characterised by limited retail engagement in capital markets, understanding the determinants of investment behaviour becomes essential. The research focuses on three principal constructs: Emotional Intelligence, Personality Traits, and Financial Literacy, and evaluates the newlinemediating influence of Risk Perception and Financial Self-Efficacy on the intention to invest in equities. Emotional Intelligence is conceptualised as the individual s ability to newlineperceive, regulate, and utilise emotions in goal-directed behaviour, including financial decision-making. Investors with higher Emotional Intelligence are generally better equipped to manage emotional volatility, avoid impulsive decisions, and sustain rational investment strategies. The role of Personality Traits is evaluated within the framework of the Big Five Model, explicitly focusing on conscientiousness, openness to experience, and extraversion, which are newlinehypothesised to influence investment attitudes and behaviours. Financial Literacy, the knowledge and understanding of financial principles, enables individuals to evaluate investment alternatives, assess risk, and make informed financial decisions. Together, these psychological and cognitive constructs are posited to contribute to investment intention interactively. The study is anchored in robust theoretical frameworks, including the Theory of Planned Behaviour, which posits that intention is shaped by attitudes, subjective norms, and perceived behavioural control. Social Cognitive Theory newlineunderscores the importance of self-efficacy in behavioural outcomes. Human Capital Theory highlights the role of knowledge and skills in economic productivity. The Big Five Personality Model provides a structured lens to understand individual behavioural tendencies in financial contexts.