Sujenthirai1, A.P.N. Raja Bandara2 and W.A.R. Senevirathne3
123Department of Accounting & Finance, Faculty of Management studies,
The Open University of Sri Lanka
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DOI : 10.57075/jaf922206
Rationality among the investors in decision making is essence for the performance of Colombo stock exchange (CSE) and also to development of country’s economy. Investor’s behaviour is unpredictable by any economist and even by equity market experts. Investor in the CSE can exhibit rational or irrational behaviour due to the multiple factors affecting investment. Therefore, study of investors behaviour is vital for improve the rationality among investors. As reviewed from literatures of many article, researchers found that, the increasing level of financial literacy and high level of practice in investment skills can improve the rationality of investment decision. The Covid-19 pandemic has driven in the explosive growth of “Digital” Financial Services (DFS) and online trading in CSE. Therefore, it is vital for the investor to familiar with digital advancement. Accordingly, Present study amid to analyse the impact of financial literacy and investment skills on investors behaviour and further carried the mediation analyse of digital literacy. Researchers point of view is “financial literacy teach investor to use money efficiently while, investment skills provide the ability to track, collect, analyse and research data to make decision in order to select the most profitable portfolio in CSE. However digital literacy is vital to apply the knowledge of Finance and investment skills in making investment decision in CSE”. This study conducted to identify the rationality of investor’s behaviour from assessing the impact of financial literacy and investment skills level of investors in CSE, and find the mediating role of Digital literacy. A self-administrated questionnaire was issued to the investors in CSE and 227 responses were collected via online. Present study adopted descriptive and inferential statistics to measure the independent- dependent relationship and Mediation relationship of the study. The findings revealed that, financial literacy and investment skills have impact on investor’s behaviour whereas digital literacy does not impact on investor’s behaviour. Moreover, findings revealed that, primal mediation of the study was insignificant accordingly there is no mediation predicted in present study.
Keywords: Investors behaviour, Financial Literacy, Investment Skills, Digital Literacy and Colombo Stock Exchange