Integrating Financial Literacy, Experience, and Risk Perception in Shaping Generation Z Decisions Through Investment Interest

Abstract

The rapid digitalization of the capital market has significantly increased the number of Generation Z investors in Indonesia. This phenomenon has not been fully accompanied by rational investment decision-making, as many young investors remain vulnerable to social trends and herding behavior. This study aims to analyze how financial literacy, investment experience, and risk perception shape investment decisions among Generation Z stock investors in Tangerang Raya, with investment interest serving as a mediating (intervening) variable. Using a quantitative approach, data were collected through online Likert-scale questionnaires from 200 Generation Z respondents selected through purposive sampling. Data were analyzed using Partial Least Squares-based Structural Equation Modeling (SEM-PLS) in SmartPLS. The findings reveal that financial literacy, investment experience, and risk perception have a positive and significant direct impact on both investment interest and investment decisions. Investment interest is empirically proven to act as a significant mediating variable that reinforces the relationship between these three independent factors and the final investment decision. These results highlight the critical role of strengthening financial literacy and cultivating a rational risk perception to foster healthy investment interest, thereby driving mature and sustainable investment decision-making among young investors. This study contributes advances behavioral finance literature by validating investment interest as a critical bridging mechanism that transforms cognitive and psychological preparedness into concrete investment decisions within the Theory of Planned Behavior framework. These findings provide a foundation for regulators and fintech platforms to design structured, risk-oriented educational frameworks for young investors.