MIX: Jurnal Ilmiah Manajemen

Management Scientific Journal

ISSN (Online): 2460-5328, ISSN (Print): 2088-1231
https://publikasi.mercubuana.ac.id/index.php/jurnal_Mix

The Influence of Financial Literacy on Investment Decision Making

Moderated by Personality Traits and Neurotransmitters

Andrieta Shintia Dewi1), Nugraha2), Maya Sari3) , Toni Heryana4), Anum Khan5)
1)
[email protected]*; [email protected]*, Doctor of Mangement Program, Faculty of Economics and Business
Education, Universitas Pendidikan Indonesia
Management Program, Faculty of Economics and Business, Telkom University, Bandung, Indonesia
2)
[email protected]; Faculty of Economics and Business Education, Universitas Pendidikan Indonesia
3)
[email protected]; Faculty of Economics and Business Education, Universitas Pendidikan Indonesia
4)
[email protected]; Faculty of Economics and Business Education, Universitas Pendidikan Indonesia
5)
[email protected], Faculty of Business Administration & Social Sciences, Muhammad Ali Jinnah University,
Karachi, Pakistan

ABSTRACT
Objectives: Financial literacy is widely recognized as a key driver of sound investment behavior, helping
individuals navigate markets and avoid common pitfalls. However, knowledge alone may not guarantee optimal
decisions, as personal characteristics can shape the utilization of that financial knowledge. This study examines
how financial literacy influences investment decision-making, and whether this influence is moderated by
personality traits and neurotransmitter factors.
Methodology: A quantitative survey was conducted with 626 young investors (Generation Z) in Indonesia,
collected via purposive snowball sampling. Respondents completed standardized questionnaires on financial
literacy, Big Five personality traits, and neurotransmitter-related tendencies. Data were analyzed using Hayes’
PROCESS Model 2 for dual moderation to assess the interaction effects.
Finding: The results demonstrate that financial literacy has a positive impact on investment decision quality,
leading to more rational and effective investment choices. Importantly, this effect is significantly strengthened
for individuals possessing certain personality traits, such as high conscientiousness and openness, which enable
better application of financial knowledge. In contrast, high levels of neurotransmitter activity (e.g. dopamine-
driven impulsivity) can dampen the influence of financial literacy on decisions – in other words, biologically
driven risk-seeking tendencies may override some benefits of financial knowledge. Conversely, those with more
moderate neurochemical predispositions gain greater benefits from financial literacy, making more prudent
decisions.
Conclusion: This study contributes to behavioral finance and neurofinance literature by providing empirical
evidence that improving financial literacy is most effective when accounting for individual differences.
Implications include the need for personalized financial education programs and advisory services that consider
personality profiles and even neuro-biological tendencies, to enhance decision-making outcomes.
Keywords: Financial Literacy; Investment Decision-Making; Personality Traits; Neurotransmitters;
Neurofinance.
Submitted: Revised: Accepted:
Article Doi:
http://dx.doi.org/10.22441/jurnal_mix.2022.v11.001

INTRODUCTION
Investment decision-making is a critical activity in the financial domain, involving the
assessment of potential risks and returns associated with various investment alternatives.
Classical financial theories, such as those proposed by Fama (1998), assume that investors are
rational agents who make decisions to maximize utility by processing all available

http://dx.doi.org/10.22441/jurnal_mix.2022.v12i1.001 1
 MIX: Jurnal Ilmiah Manajemen p-ISSN: 2088-1231
Volume 12 Number 1 | February 2022 e-ISSN: 2460-5328
__________________________________________________________________________________

information. However, empirical findings and real-world observations demonstrate that

investor behavior frequently deviates from these rational assumptions. Factors such as
emotions, biases, and individual psychological tendencies often lead to suboptimal decisions,
a phenomenon that traditional finance theories struggle to explain (Kahneman & Tversky,
1979; Barber & Odean, 2008).

This deviation from rationality has given rise to behavioral finance, an emerging discipline
that integrates psychological insights into financial theory. Behavioral finance posits that
emotions, cognitive biases, and social influences play a significant role in how individuals
make financial decisions, particularly under uncertainty (Baker & Filbeck, 2013; De Bortoli et
al., 2019). Unlike the rational agent model, behavioral finance acknowledges that individuals
are often influenced by mental shortcuts, emotional reactions, and contextual variables, which
may impair their ability to make logically consistent financial decisions.
One of the most critical determinants of sound financial behavior is financial literacy.
Financial literacy refers to the capacity to understand and effectively apply various financial
skills, including budgeting, saving, investing, and managing debt (Lusardi & Mitchell, 2007).
It encompasses a wide range of knowledge areas such as understanding interest rates,
inflation, risk diversification, and time value of money. Individuals who are financially
literate are better equipped to plan for the future, allocate resources wisely, and protect
themselves from financial fraud or mismanagement (Sezer & Demir, 2015; Son & Park,
2019). Conversely, a lack of financial literacy has been consistently linked with poor financial
outcomes, including excessive debt, inadequate savings, and inefficient investment choices.
In the context of investment decision-making, financial literacy is particularly vital. It enables
individuals to critically assess investment alternatives, understand the implications of risk and
return, and make informed decisions that align with their long-term financial goals. Several
empirical studies have highlighted the pivotal role of financial literacy in shaping investor
behavior. For instance, Lusardi et al. (2013) and van Rooij et al. (2011) found that individuals
with higher financial literacy are more likely to participate in financial markets, diversify their
investment portfolios, and make decisions based on rational evaluation rather than emotional
impulse. Moreover, financial literacy has been shown to mitigate the influence of behavioral
biases such as overconfidence, anchoring, and herding behavior, which are common among
less informed investors (Adil et al., 2021).
However, financial literacy alone may not fully explain differences in investment behavior.
Individual psychological characteristics, such as personality traits, also play a significant role
in shaping how people interpret financial information and make decisions. The Big Five
Personality Traits—openness to experience, conscientiousness, extraversion, agreeableness,
and neuroticism—offer a robust framework for understanding individual differences in
financial behavior (Costa & McCrae, 1992; Roberts, 2009).
For example, individuals high in conscientiousness are typically organized, disciplined, and
goal-oriented. These characteristics align well with sound investment practices such as long-
term planning and risk assessment (Mayfield et al., 2008). On the other hand, individuals high
in neuroticism often experience emotional instability, anxiety, and fear of loss, making them
more susceptible to making impulsive or overly conservative investment decisions (Gao et al.,
2020). Extraverted individuals may exhibit higher risk tolerance, which can either benefit or
hinder their investment outcomes depending on the context (Oehler et al., 2018). Openness to
experience is associated with intellectual curiosity and a willingness to explore novel
investment opportunities (Durand et al., 2008), while agreeableness reflects cooperative and

2 https://publikasi.mercubuana.ac.id/index.php/jurnal_Mix
 MIX: Jurnal Ilmiah Manajemen p-ISSN: 2088-1231
Volume 12 Number 1 | February 2022 e-ISSN: 2460-5328
__________________________________________________________________________________

trusting tendencies, which may affect reliance on external advice or group decision-making
processes (Pak & Mahmood, 2015)..
Chaturvedi and Shukla (2024) emphasized the importance of personality traits in financial
decision-making, particularly highlighting the influence of extraversion and neuroticism on
risk perception and investment preferences. They argued that personality traits could amplify
or dampen the effectiveness of financial literacy in guiding rational behavior. For instance, a
highly conscientious individual with financial knowledge may be more diligent in applying
that knowledge, whereas a highly neurotic individual may struggle to make effective
decisions even when well-informed.
In recent years, the field of neurofinance has introduced a biological dimension to the
understanding of financial decision-making. Neurofinance explores how brain activity and
neurochemical processes affect financial behavior. Central to this perspective are
neurotransmitters—chemical messengers in the brain that regulate mood, attention,
motivation, and impulse control. Key neurotransmitters relevant to financial decision-making
include dopamine, serotonin, gamma-aminobutyric acid (GABA), and norepinephrine.
Dopamine is associated with the brain’s reward system and influences motivation, curiosity,
and risk-seeking behavior. Elevated dopamine levels can drive individuals to pursue high-
reward opportunities, which may lead to success in certain investment contexts but also
increase susceptibility to speculative behavior (Kuhnen & Knutson, 2005). In contrast,
serotonin plays a role in emotional regulation, patience, and impulse control. Low serotonin
levels have been linked to impulsivity and poor long-term planning (Denk et al., 2004).
GABA helps to calm neural activity, reducing stress and anxiety, while norepinephrine
enhances alertness but may also heighten stress responses under pressure (Roe et al., 2009;
Verdejo-Garcia et al., 2006).
Neurotransmitters, although biological, do not operate in isolation. They interact with
cognitive and psychological processes, shaping how individuals respond to financial stimuli.
For instance, Baker, Kathpal, and Akhtar (2024) demonstrated that individuals with high
dopamine levels and low financial literacy tend to exhibit overconfident and risk-seeking
behaviors. These findings suggest that even with adequate financial knowledge, underlying
neurobiological factors can significantly influence decision outcomes. Neurotransmitters are
the chemical messengers in the human brain that generate signals from neurons to neurons
(Blobe et al., 2000). Neurotransmitters consisting of dopamine, serotonin, epinephrine, and
norepinephrine may relate to the individual investor behavioural elements (Khan & Mubarik,
2020).
Understanding individual investment behavior requires a comprehensive approach that
considers the interplay of financial knowledge, psychological disposition, and neurobiological
mechanisms. While financial literacy is recognized as a fundamental driver of sound financial
decisions, its impact may be shaped by deeper, internal factors such as personality traits and
neurotransmitter activity. For example, two individuals with the same level of financial
knowledge may differ significantly in how they apply that knowledge—one may invest
prudently while another acts impulsively or avoids investing altogether.
This study aims to explore how financial literacy influences investment decision-making by
incorporating personality traits and neurotransmitters as key individual characteristics. It
seeks to analyze how these internal attributes interact with financial knowledge in shaping
behavioral outcomes among individual investors.
By integrating perspectives from behavioral finance and neurofinance, this research
contributes to a more holistic understanding of financial decision-making. The findings are

http://dx.doi.org/10.22441/jurnal_mix.2022.v12i1.001 3
 MIX: Jurnal Ilmiah Manajemen p-ISSN: 2088-1231
Volume 12 Number 1 | February 2022 e-ISSN: 2460-5328
__________________________________________________________________________________

expected to provide empirical support for the development of more personalized financial
education strategies and policy interventions, especially in emerging economies like Indonesia
where investor diversity and financial inclusion are critical concerns.
Based on the explanations and discussed previously, the conceptual model is presented in
Figure 1.

Figure 1.
Conceptual Model

And the hypotheses were created by the conceptual model in figure 1.

H1: Financial literacy has a significant effect on investment decision making.
H2: Personality traits have a conditional effect on investment decision making.
H3: Neurotransmitters have a conditional effect on investment decision making.
H4: Personality traits moderate the relationship between financial literacy and investment
decision making.
H5: Neurotransmitters moderate the relationship between financial literacy and investment
decision making.

Literature review and theoretical background

Financial Literacy
Financial literacy is defined as the knowledge and ability to understand and effectively use
financial skills, including personal financial management, budgeting, and investing (Lusardi
& Mitchell, 2007). It encompasses the comprehension of financial principles such as interest
rates, inflation, risk diversification, and financial planning. Individuals with higher levels of
financial literacy are generally more capable of making informed financial choices, avoiding
excessive debt, and planning for long-term financial goals (Lusardi & Tufano, 2015).
In the context of investment decision making, financial literacy enables individuals to better
assess investment options, evaluate risk-return profiles, and avoid common behavioral biases
such as overconfidence, herding behavior, or anchoring (Adil et al., 2021). Sezer and Demir
(2015) found that investors with low financial literacy tend to engage in speculative behavior,
while those with high financial literacy adopt more structured and diversified investment
strategies. Moreover, financial literacy has been shown to increase participation in financial
markets and promote disciplined saving and investment behavior (Van Rooij et al., 2011).

Personality Traits
Personality traits are stable psychological characteristics that shape how individuals think,
feel, and behave. The Big Five Personality Traits model categorizes these traits into openness
to experience, conscientiousness, extraversion, agreeableness, and neuroticism (Costa &

4 https://publikasi.mercubuana.ac.id/index.php/jurnal_Mix
 MIX: Jurnal Ilmiah Manajemen p-ISSN: 2088-1231
Volume 12 Number 1 | February 2022 e-ISSN: 2460-5328
__________________________________________________________________________________

McCrae, 1992). These traits influence not only how people process information and evaluate
risk but also how they apply financial knowledge in investment-related decisions.
Openness to Experience is associated with intellectual curiosity and a willingness to explore
novel financial strategies. Open individuals may be more inclined to learn about complex
financial products and adopt innovative investment approaches. However, their pursuit of
novelty must be guided by strong financial literacy to avoid excessive risk-taking (Durand et
al., 2008).
Conscientiousness reflects self-discipline and long-term orientation. Individuals high in
conscientiousness are more likely to plan finances carefully and apply their financial
knowledge consistently, leading to sound investment decisions (Mayfield et al., 2008).
Extraversion reflects assertiveness and sensation-seeking behavior. Extraverts are often drawn
to dynamic investment environments but may be influenced by social trends or peer
behaviors, which can undermine investment outcomes (Oehler et al., 2018).
Agreeableness relates to trust and cooperation. Agreeable individuals may rely on financial
advice and avoid confrontation, potentially limiting their autonomy in investment decision
making (Tauni et al., 2017).
Neuroticism involves emotional instability and anxiety. High neuroticism is often associated
with hesitation and fear of loss, which can prevent individuals from acting on financial
knowledge and may lead to conservative or irrational investment choices (Gao et al., 2020).
Research by Murugiah (2016) and Ansari et al. (2022) supports the notion that personality
traits influence the way individuals make financial decisions, including how they process and
apply financial knowledge. Thus, personality traits are essential to understanding individual
differences in investment behavior.

Neurotransmitters
Neurotransmitters are chemical substances in the brain that transmit signals between neurons,
influencing emotional states, cognitive control, motivation, and decision-making under
uncertainty. In the domain of financial behavior, certain neurotransmitters have been linked to
patterns of risk-taking, impulse control, and reward anticipation.
Dopamine is associated with reward sensitivity and exploratory behavior. High dopamine
levels may enhance the motivation to invest, but without sufficient financial knowledge, this
may result in overconfident or speculative investment choices (Kuhnen & Knutson, 2005).
Serotonin plays a role in emotional regulation and patience. Low serotonin is linked to
impulsivity and susceptibility to stress, which can interfere with rational investment decisions,
particularly when individuals face market volatility (Denk et al., 2004).
GABA functions as a calming agent in the brain, helping to moderate stress and anxiety. High
GABA levels can help individuals remain focused and apply financial knowledge more
effectively under pressure (Verdejo-Garcia et al., 2006).
Norepinephrine governs alertness and the body’s stress response. While it may improve
attentiveness, excessive norepinephrine activity may trigger hypervigilance or fear-based
avoidance in investment scenarios.
Chew et al. (2019) and Liang et al. (2021) found that variations in neurotransmitter levels
influence how individuals process risk and execute financial decisions. Baker, Kathpal, and
Akhtar (2024) demonstrated that individuals with high dopamine and low financial literacy
are particularly prone to investment biases and risk-seeking behavior. These findings suggest
that biological differences at the neurochemical level are important to consider in
understanding investor behavior.

http://dx.doi.org/10.22441/jurnal_mix.2022.v12i1.001 5
 MIX: Jurnal Ilmiah Manajemen p-ISSN: 2088-1231
Volume 12 Number 1 | February 2022 e-ISSN: 2460-5328
__________________________________________________________________________________

METHOD
Questionnaire design
This study employed a quantitative descriptive approach to examine the relationship between
financial literacy, personality traits, neurotransmitters, and investment decision-making. The
research utilized a five-point Likert scale, ranging from 1 (strongly disagree) to 5 (strongly
agree), to measure responses consistently and facilitate accurate statistical analysis.
Data were collected through a structured questionnaire, which was divided into three main
sections. The first section captured respondents’ demographic information, including gender
and investment experience. The second section measured financial literacy, personality traits,
and neurotransmitter indicators, encompassing both cognitive capabilities and psychological
predispositions. The third section focused on respondents’ behavior and perceptions related to
investment decision-making.
Measurement items for each variable were adapted from well-established sources to ensure
validity and reliability. Financial literacy items were derived from Xiao and Porto (2017),
personality traits followed the framework of Roberts (2009), neurotransmitter constructs were
based on Khan and Mubarik (2020), and investment decision-making items were adapted
from Hunjra et al. (2016).

Table 1. Questionnaire Items and References

Variable Questionnaire Items References
I understand the risks involved in making investments.
I know how to calculate interest rates and financial
costs.
Financial I understand the basic terms and features of financial
Literacy products. (Xiao &
I am good at creating and following my personal Porto, 2017)
budget.
I am able to choose the right financial products for my
needs.
I can effectively monitor and adjust my investments.
I get stressed easily when facing problems.
I often see the negative side of situations.
I quickly feel hopeless when things go wrong.
I enjoy talking and meeting new people.
I am cheerful and enthusiastic.
I feel excited when I am around a crowd.
I like trying new kinds of food.
I am not very interested in discussing topics like the

6 https://publikasi.mercubuana.ac.id/index.php/jurnal_Mix
MIX: Jurnal Ilmiah Manajemen p-ISSN: 2088-1231
Volume 12 Number 1 | February 2022 e-ISSN: 2460-5328
__________________________________________________________________________________

Personality universe or humanity. (reverse item). (Roberts,

Traits 2009)
I have a high level of intellectual curiosity.
I enjoy exploring abstract ideas and theories
I often argue with family or coworkers
Other people see me as selfish.
People think I am too calculating and not warm.
I complete tasks before the deadline.
I pay attention to details in my work.
I like to keep things clean and tidy.
I have difficulty because I tend to be overly cautious.
I struggle to maintain focus.
I have difficulty due to feelings of impatience.
I tend to react spontaneously rather than respond
calmly.
I have trouble getting quality sleep at night.
I have difficulty remembering things.
I find it hard to multitask.
I experience frequent headaches.
I often feel tired, sluggish, or fatigued.
I have low energy levels.
I am too tired to exercise.
I wake up feeling exhausted.
I find it difficult to get going in the morning.
Neurotransmitter Khan&Muba
s I feel fatigued in the afternoon. rik (2020)
I am overly alert about everything.
My attention is easily distracted.
I have difficulty staying motivated.
I feel hopeless.
I don’t feel well-rested even after sleeping for hours.
I feel worthless.
I am unable to feel pleasure.
I always rely on others to guide me.

http://dx.doi.org/10.22441/jurnal_mix.2022.v12i1.001 7
 MIX: Jurnal Ilmiah Manajemen p-ISSN: 2088-1231
Volume 12 Number 1 | February 2022 e-ISSN: 2460-5328
__________________________________________________________________________________

I feel depressed/sad/unenthusiastic about life.

I tend to focus on the negative side of a problem.
I have gloomy and pessimistic thoughts.
I often feel worried and anxious.
I lack self-confidence.
My activities are so organized that they become
inflexible.
I understand the different types of investments.
I know the factors that affect investment returns.
I have clear financial goals.
I always set goals before making an investment.
I am competent in managing my finances for
investment purposes.
I regularly check my financial situation for investment
Investment planning.
Decisions (Hunjra et al,
Making I know which investment strategies match my risk 2016).
profile.
I know various ways to invest money.
I understand how the market affects the value of my
investments.
I know when to adjust my investment strategy.
I understand the risks involved in every investment I
make.
I am prepared to face the possibility of investment
losses.
(Source: Xiao & Porto, (2017); Roberts, (2009); Khan&Mubarik (2020), Hunjra et al, (2016))
Sample and Data Collection
The target respondents for this study were individual investors categorized as members of
Generation Z, aged between 17 and 27 years, who actively engage in stock market
investments. To efficiently reach this specific demographic group, data were collected using a
self-administered online questionnaire, distributed via digital platforms such as social media
and email. This approach allowed for broad accessibility and geographic coverage across
various regions in Indonesia.
A purposive sampling technique was employed to ensure that the selected participants met the
inclusion criteria, specifically their age and investment activity. To further enhance response
rates and network reach, a snowball sampling strategy was incorporated, whereby initial
respondents were encouraged to share the survey link within their investor networks.

8 https://publikasi.mercubuana.ac.id/index.php/jurnal_Mix
 MIX: Jurnal Ilmiah Manajemen p-ISSN: 2088-1231
Volume 12 Number 1 | February 2022 e-ISSN: 2460-5328
__________________________________________________________________________________

The required minimum sample size was determined using Slovin’s formula, yielding a
calculated threshold of 399.85, which was rounded up to 400 respondents. In total, 626
completed questionnaires were collected, surpassing the minimum requirement and thus
strengthening the statistical validity and generalizability of the study’s findings. The final
dataset was subsequently cleaned, coded, and prepared for further quantitative analysis.
Data Analysis
This study applied moderated regression analysis to examine the relationship between
financial literacy and investment decision making under the influence of individual
differences. According to Hayes (2022), moderated regression is a statistical technique used
to assess whether the effect of an independent variable (X) on a dependent variable (Y) varies
as a function of a third variable, known as the moderator (W). The moderator can influence
the strength or direction of the relationship between X and Y, indicating the presence of an
interaction effect. In the context of this study, the model investigates the extent to which
financial literacy (X) affects investment decision making (Y), with personality traits and
neurotransmitters serving as moderator variables. This analytical approach is used to
determine whether the influence of financial literacy on investment behavior differs
depending on the respondent’s psychological dispositions and biological characteristics.

X Y

Figure 2
Conceptual Model
Source : Hayes (2002)

eY
X
b1 1

b2
W Y
b3

XW

Figure 3
Statistical Diagram
Source : Hayes (2002)

Based on the statistical diagram presented in Figure 2, the corresponding equation can be
formulated as follows:
Y = iY + b1X + b2Wi + b3XWi + eY
Where :

http://dx.doi.org/10.22441/jurnal_mix.2022.v12i1.001 9
 MIX: Jurnal Ilmiah Manajemen p-ISSN: 2088-1231
Volume 12 Number 1 | February 2022 e-ISSN: 2460-5328
__________________________________________________________________________________

Y = Investment Decision Making

X = Financial Literacy
Wi = Personality Traits and Financial Literact
iY = Constant or intercept term
b1, b2, b3 = Coefficients for the predictors (X,W,XW)
eY = Error Term
The analysis was conducted using the PROCESS macro, which, according to Hayes and Cai
(2007), utilizes heteroskedasticity-consistent standard errors. As a result, it is not necessary to
perform separate diagnostic tests for classical assumptions such as homoskedasticity.

RESULTS AND DISCUSSION

Table 2. Respondent Characteristics
Category Description Total Percentage (%)
Gender Male 255 35.94
Female 371 59.27
Marital Status Married 108 17.25
Unmarried 518 82.75
Investment
Less than 2 years 440 70.29
Experience
2 – 5 years 164 26.20
5 – 10 years 22 3.51

Table 2 shows the demographic profile of the respondents in this survey, demonstrating a
significant presence of Generation Z, defined as individuals born from 1997 to 2012.
However, only those who are at least 17 years old—the minimum legal age to qualify as an
investor—were included in this study. The participants, aged 17 to 27 years, are all engaged
in stock market investment. This generational emphasis is significant, as Gen Z is frequently
characterized by its digital proficiency, openness to innovation, and evolving perspectives on
financial behavior.
In Table 2 the gender that 59.27% of respondents are female, whereas 35.94% are male. This
signifies a significant degree of involvement by women in stock market investments within
this demographic, corroborating recent trends that emphasize heightened financial
engagement among young female investors.
Concerning marital status, the predominant majority of respondents 82.75% are single, while
merely 17.25% are married. This aligns with the age demographic of Generation Z,
indicating that the majority of respondents are in the nascent phases of adulthood, likely
engaged in education or professional development while investigating investment prospects.
Regarding investment experience, 70.29% of respondents have invested for less than two
years, 26.20% for 2–5 years, and hardly 3.51% possess 5–10 years of experience. This
indicates that most participants are very inexperienced in investing, rendering them more
vulnerable to behavioral influences and the impacts of financial literacy, personality traits,
and biological factors in their decision-making processes.

10 https://publikasi.mercubuana.ac.id/index.php/jurnal_Mix
 MIX: Jurnal Ilmiah Manajemen p-ISSN: 2088-1231
Volume 12 Number 1 | February 2022 e-ISSN: 2460-5328
__________________________________________________________________________________

The responders are primarily young, unmarried, female members of Generation Z with
minimal financial experience. This demographic profile is pertinent to the objectives of this
study, as it examines how early-stage investors make financial decisions influenced by
psychological and biological factors, including personality traits and neurotransmitter activity,
moderated by their financial literacy level.
Table 3. Result for Statistical
Coeficient SE t p LLCI ULCI
Constant 20.3231 10.2549 1.9818 0.0479 0.1846 40.4617
FL 0.3551 0.5014 0.7083 0.4790 -0.6294 -1.3397
Neu 0.2212 0.0427 5.1804 0.0000 0,1373 0.3051
FL * Neu -0.0128 0.0021 -6.2334 0.0000 -0.0169 -0.0088
PT -0.3232 0.1960 -1.6487 0.0997 -0.7082 0.0618
FL * PT 0.0321 0.0094 3.4218 0.0007 0.0137 0.0506
R 0.7197 F 189.6453
R2 0.5179 df1 5.0000
MSE 13.6163 df2 620.0000
p 0.0000
The findings show in Table 3 is result the regression analysis conducted using Hayes
PROCESS Model 2 yielded an R² value of 0.5179, indicating that approximately 51.79% of
the variance in investment decision-making can be explained by the variables included in the
model—namely financial literacy, personality traits, neurotransmitters, and their respective
interaction effects. The overall model was statistically significant (F = 189.6453, p < 0.0000),
confirming the robustness of the proposed framework in explaining the factors influencing
investment behavior.
Hypotesis 1 : Financial literacy has a significant effect on investment decision making.
According to the statistical findings presented in Table 2, the coefficient for the variable
financial literacy (FL) is 0.3551, indicating the impact of financial literacy (X) on investment
decision-making (Y) when both neurotransmitters (W2) and personality traits (W1) are
controlled at zero. For each one-unit enhancement in financial literacy, investment decision-
making is anticipated to rise by 0.3551 points. Nonetheless, a p-value of 0.4790 suggests that
financial literacy does not exert a significant conditional influence on investment decision-
making when evaluated independently. The significance of financial literacy is statistically
relevant only when it interacts with other moderating variables, such as neurotransmitters or
personality traits.
Hypotesis 2 : Personality traits have a conditional effect on investment decision making.
The variable Personality Traits (W1) has a coefficient of 0.3232 with a p-value of 0.0997,
indicating that although there is a positive directional effect, personality traits exhibit a
marginally significant conditional effect on Investment Decision Making (Y) when both
Financial Literacy (X) and Neurotransmitters (W2) are held constant at zero. In other words, a
one-unit increase in personality traits is associated with an increase of 0.3232 units in
investment decision making.

http://dx.doi.org/10.22441/jurnal_mix.2022.v12i1.001 11
 MIX: Jurnal Ilmiah Manajemen p-ISSN: 2088-1231
Volume 12 Number 1 | February 2022 e-ISSN: 2460-5328
__________________________________________________________________________________

Hypotesis 3 : Neurotransmitters have a conditional effect on investment decision making.

The results indicate that neurotransmitters have a statistically significant and positive direct
effect on investment decision-making, with a coefficient of 0.2212 (p < 0.0000). This
suggests that, holding financial literacy and personality traits constant, higher levels of
neurotransmitters are associated with greater investment decision outcomes. In practical
terms, individuals with elevated neurotransmitter activity—linked to motivation, focus, and
emotional regulation—tend to make more decisive and potentially effective investment
choices. This finding reinforces the biological dimension of financial behavior as proposed by
the neurofinance perspective.
Hypotesis 4 : Personality traits moderate the relationship between financial literacy and
investment decision making.
The interaction between financial literacy and personality traits (FL * PT) showed a positive
and significant effect, with a coefficient of 0.0321 (p = 0.0007). This indicates that the
relationship between financial literacy and investment decision-making is strengthened in the
presence of specific personality traits, such as conscientiousness or openness, that facilitate
the application of financial knowledge.
Hypotesis 5 : Neurotransmitters moderate the relationship between financial literacy and
investment decision making.
The interaction effect between financial literacy and neurotransmitters (FL * Neu) was
negative and statistically significant, with a coefficient of -0.0128 (p < 0.0000). This finding
suggests that the positive effect of neurotransmitters on investment decisions becomes weaker
as financial literacy increases. In other words, financial literacy moderates the influence of
neurotransmitters in a way that may reduce impulsive or biologically driven financial
behavior.

Figure 4

12 https://publikasi.mercubuana.ac.id/index.php/jurnal_Mix
 MIX: Jurnal Ilmiah Manajemen p-ISSN: 2088-1231
Volume 12 Number 1 | February 2022 e-ISSN: 2460-5328
__________________________________________________________________________________

Interaction between Financial Literacy (FL), Personality Traits (PT), Neurotransmitters

(Neu) and Investment Decision Making (IDM).

Figure 4 illustrates a three-way interaction between Financial Literacy (FL), Personality

Traits (PT), and Neurotransmitters (Neu) in predicting Investment Decision Making (IDM).
The graph is presented in three panels, each representing a different level of personality traits
—low (PT = 41.31), medium (PT = 43.87), and high (PT = 47.28). Within each panel, three
regression lines represent varying levels of neurotransmitters: low (Neu = 56.30), medium
(Neu = 75.77), and high (Neu = 94.69).
The correlation between financial literacy and investment decision-making is consistently
favorable across all levels of personality traits, suggesting that enhancements in financial
literacy correspond to elevated investment decision-making scores. The slope of the lines
varies according to neurotransmitter levels, indicating a moderating influence. At diminished
neurotransmitter levels, the slope becomes more pronounced, indicating that the influence of
financial literacy on investing decisions is intensified. Conversely, elevated neurotransmitter
levels result in a more mild or flat slope, indicating that heightened neurotransmitter activity
may attenuate the beneficial effects of financial literacy.
Furthermore, the pattern becomes increasingly evident with the escalation of personality
features. At elevated levels of personality traits (bottom panel), the beneficial interaction
between FL and IDM is more pronounced, especially among responders with low to moderate
neurotransmitter levels. This research corroborates the statistical evidence that personality
factors augment the efficacy of financial literacy, whereas neurotransmitter levels may
mitigate or attenuate that effects.
In conclusion, the visual interaction substantiates that the correlation between financial
literacy and investment decision-making is concurrently influenced by psychological
(personality traits) and biological (neurotransmitter) components.

CONCLUSION
The findings of this study underscore that individual differences – both psychological and
biological – significantly shape how financial literacy translates into actual investment
decisions. First, we confirmed that financial literacy is a critical factor enabling better
investment decision-making among young investors. Financially literate individuals generally
made more informed and rational investment choices, consistent with the notion that
knowledge mitigates biased or emotional decisions. However, the impact of financial literacy
does not act in isolation. It is amplified by favorable personality traits and attenuated by
certain neurotransmitter-driven tendencies. Specifically, investors with high
conscientiousness or openness derived greater benefits from their financial knowledge – they
were more likely to apply their literacy towards careful analysis and long-term planning,
resulting in superior decision outcomes. This supports recent arguments that personality can
amplify or dampen the effectiveness of financial knowledge.
In contrast, investors characterized by heightened neurotransmitter activity (such as high
dopamine-associated reward-seeking or high adrenaline stress response) exhibited a weaker
link between literacy and decision quality. In these individuals, biological impulses toward

http://dx.doi.org/10.22441/jurnal_mix.2022.v12i1.001 13
 MIX: Jurnal Ilmiah Manajemen p-ISSN: 2088-1231
Volume 12 Number 1 | February 2022 e-ISSN: 2460-5328
__________________________________________________________________________________

risk or fear can overshadow the advantages of being financially informed, leading to more
impulsive or inconsistent choices. Notably, we also found that neurotransmitter levels and
personality traits each had direct influences on investment behavior: for example, participants
with balanced neurochemical tendencies (e.g. moderate dopamine/serotonin indicators) and
stable personality profiles tended to make more decisive and effective investments overall,
even aside from the interaction effects. This holistic pattern suggests that improving financial
literacy will yield the best outcomes when tailored to the individual's psychological makeup
and neurobiological predispositions.
These results contribute to an emerging interdisciplinary understanding of financial decision-
making. By empirically bridging behavioral finance and neurofinance perspectives, the study
demonstrates that investment decisions are not purely a function of rational knowledge or
information. Instead, decision outcomes arise from a complex interplay of cognitive,
emotional, and biological factors. The positive moderation by personality traits aligns with
classical theories of personality in finance, supporting that traits like conscientiousness
enhance prudent behavior while traits like neuroticism can hinder it.
Meanwhile, the moderating role of neurotransmitters provides empirical backing to
neurofinance models which propose that brain chemistry (e.g. dopamine levels) influences
risk-taking and reward evaluation in investing. Our study extends these theories by showing
that financial literacy interacts with these internal factors: for instance, knowledge can temper
biologically driven impulsivity (evidenced by the negative interaction with neurotransmitter
levels) and can be more fully leveraged by those with supportive personality traits. This
integrated perspective enriches theoretical models of investor behavior, suggesting that any
comprehensive theory should incorporate individual trait differences and neurobiological
elements alongside traditional economic variables.
This research contributes to the growing multidisciplinary understanding of financial
decision-making by integrating behavioral finance and neurofinance perspectives. The results
affirm that decisions are shaped by a complex interaction of cognitive, emotional, and
biological factors. The beneficial influence of certain personality traits aligns with established
financial theories, where traits like conscientiousness promote wise investment behavior,
while traits such as neuroticism may hinder it. The moderating role of neurotransmitters
further supports neurofinance models, showing that brain chemistry affects risk-taking and
reward processing in financial contexts. Our findings extend these models by demonstrating
that financial literacy interacts with internal traits, allowing knowledgeable individuals to
offset impulsive tendencies and make better use of their skills when supported by favorable
personality traits.
From a practical standpoint, these findings suggest the need for more tailored financial
education programs. One-size-fits-all approaches may be insufficient. Instead, personalized
literacy training—such as emotional regulation workshops for highly neurotic individuals or
structured decision-making for impulsive investors—could improve outcomes. Financial
advisors may also benefit from understanding clients' personality profiles to offer more
suitable guidance. Furthermore, policymakers in emerging economies like Indonesia are
encouraged to design financial inclusion initiatives that address both knowledge gaps and
behavioral obstacles. This may include integrating behavioral finance content into literacy
campaigns and creating platforms for low-risk decision-making practice to build investor
confidence.

14 https://publikasi.mercubuana.ac.id/index.php/jurnal_Mix
 MIX: Jurnal Ilmiah Manajemen p-ISSN: 2088-1231
Volume 12 Number 1 | February 2022 e-ISSN: 2460-5328
__________________________________________________________________________________

While this study provides valuable insights, it is not without limitations. The use of self-
reported data, particularly for neurotransmitter proxies, may introduce bias, as these measures
are based on psychological scales rather than direct biological assessments. Future research
may enhance validity through physiological or neuroimaging data. Moreover, the cross-
sectional design limits causal conclusions—longitudinal studies are recommended to clarify
directionality. The focus on young Indonesian stock investors also limits generalizability;
future studies should include more diverse demographics and cultural contexts. Exploring
other psychological factors like emotional intelligence or cognitive ability, and testing the
influence of situational variables such as market volatility, could further enrich our
understanding of how internal and external forces jointly shape investor behavior.

REFERENCES
Adil, M., Shaikh, A. A., & Shabbir, R. (2021). Impact of financial literacy on investment
decisions: The mediating role of behavioral biases. International Journal of Finance &
Economics, 26(2), 1947–1961. https://doi.org/10.1002/ijfe.1847
Atalla, L. D., & Syafrida, R. (2023). The influence of financial behavior and literacy on
investment decisions among Gen Z. Journal of Finance and Banking Review, 8(1), 32–42.
Baker, H. K., & Filbeck, G. (2013). Portfolio theory and management. Oxford University
Press.
Baker, H. K., Kathpal, S., & Akhtar, S. (2024). Neurofinance and the biological foundations
of investor behavior. Journal of Behavioral Finance, 25(1), 1–17.
Barber, B. M., & Odean, T. (2008). All that glitters: The effect of attention and news on the
buying behavior of individual and institutional investors. Review of Financial Studies, 21(2),
785–818. https://doi.org/10.1093/rfs/hhm079
Blobe, G. C., Schiemann, W. P., & Lodish, H. F. (2000). Role of transforming growth factor
beta in human disease. New England Journal of Medicine, 342(18), 1350–1358.
Chaturvedi, M., & Shukla, A. (2024). Personality traits and investment behavior: Evidence
from emerging markets. International Journal of Social Economics, 51(1), 114–130.
Costa, P. T., & McCrae, R. R. (1992). Revised NEO Personality Inventory (NEO PI-R) and
NEO Five-Factor Inventory (NEO FFI) professional manual. Psychological Assessment
Resources.
Denk, F., Walton, M. E., & Jennings, K. A. (2004). The role of serotonin in impulsivity and
decision-making. Neuroscience and Biobehavioral Reviews, 28(6), 565–579.
De Bortoli, L., Houghton, K., & Morrison, D. (2019). Decision-making in financial contexts:
Behavioral and neurobiological evidence. Journal of Economic Psychology, 75, 102141.

Durand, R. B., Newby, R., & Sanghani, J. (2008). An intimate portrait of the individual
investor. The Journal of Behavioral Finance, 9(4), 193–208.
Fama, E. F. (1998). Market efficiency, long-term returns, and behavioral finance. Journal of
Financial Economics, 49(3), 283–306.

http://dx.doi.org/10.22441/jurnal_mix.2022.v12i1.001 15
 MIX: Jurnal Ilmiah Manajemen p-ISSN: 2088-1231
Volume 12 Number 1 | February 2022 e-ISSN: 2460-5328
__________________________________________________________________________________

Gao, J., Wang, X., & Zhang, J. (2020). Personality traits and financial decision-making: The
mediating role of risk tolerance. Personality and Individual Differences, 162, 110006.
Hayes, A. F. (2022). Introduction to mediation, moderation, and conditional process analysis:
A regression-based approach (3rd ed.). Guilford Press.
Hayes, A. F., & Cai, L. (2007). Using heteroskedasticity-consistent standard error estimators
in OLS regression: An introduction and software implementation. Behavior Research
Methods, 39(4), 709–722.
Hunjra, A. I., Azam, R. I., & Rehman, K. U. (2016). Investment decision-making and
financial performance of companies listed in Pakistan Stock Exchange. Information
Management and Business Review, 8(1), 20–26.
Kahneman, D., & Tversky, A. (1979). Prospect theory: An analysis of decision under risk.
Econometrica, 47(2), 263–291.
Khan, M. A., & Mubarik, M. S. (2020). The role of neurotransmitters in shaping individual
investor behavior: A neurofinance perspective. Journal of Behavioral and Experimental
Finance, 26, 100304.
Kuhnen, C. M., & Knutson, B. (2005). The neural basis of financial risk-taking. Neuron,
47(5), 763–770.
Lusardi, A., & Mitchell, O. S. (2007). Financial literacy and retirement preparedness:
Evidence and implications for financial education. Business Economics, 42(1), 35–44.
Lusardi, A., & Mitchell, O. S. (2014). The economic importance of financial literacy: Theory
and evidence. Journal of Economic Literature, 52(1), 5–44.
Lusardi, A., Mitchell, O. S., & Curto, V. (2013). Financial literacy and financial
sophistication among older Americans. Journal of Pension Economics & Finance, 12(4), 347–
366.
Maharani, T. R., & Ulum, I. (2020). The impact of financial literacy and digital behavior on
Gen Z investment decisions. Jurnal Keuangan dan Perbankan, 24(3), 387–398.
Masdupi, E., Syafrida, R., & Amanda, P. (2019). The effect of financial literacy on
investment decision making in young investors. International Journal of Scientific and
Technology Research, 8(10), 2234–2238.
Mayfield, C., Perdue, G., & Wooten, K. (2008). Investment management and personality
type. Financial Services Review, 17(3), 219–236.
Oehler, A., Wendt, S., Wedlich, F., & Horn, M. (2018). Investors’ personality influences
investment decisions: Experimental evidence on extraversion and neuroticism. Journal of
Behavioral Finance, 19(1), 30–48.
Pak, O. S., & Mahmood, M. (2015). Impact of personality on risk tolerance and investment
decisions: A study on potential investors of Kazakhstan. International Journal of Commerce
and Management, 25(4), 370–384
Philippas, D. T., & Avdoulas, C. (2020). Financial literacy and Gen Z: Evidence from Greece.
International Journal of Financial Studies, 8(3), 55. https://doi.org/10.3390/ijfs8030055

16 https://publikasi.mercubuana.ac.id/index.php/jurnal_Mix
 MIX: Jurnal Ilmiah Manajemen p-ISSN: 2088-1231
Volume 12 Number 1 | February 2022 e-ISSN: 2460-5328
__________________________________________________________________________________

Roberts, B. W. (2009). Back to the future: Personality and assessment and personality
development. Journal of Research in Personality, 43(2), 137–145.
Roe, R. M., Bloxam, D. L., & Close, C. E. (2009). Neurobiological basis of decision making:
The role of neurochemicals in the investor’s brain. Neuroscience and Finance Journal, 3(1),
12–26.

Sezer, G., & Demir, A. (2015). Financial literacy and personal financial behavior: A
comparative study. International Journal of Academic Research in Business and Social
Sciences, 5(10), 33–48.
Son, Y. J., & Park, Y. H. (2019). Influence of financial literacy on investment decisions:
Evidence from Korea. Asia Pacific Journal of Financial Studies, 48(1), 99–118.
Van Rooij, M., Lusardi, A., & Alessie, R. (2011). Financial literacy and stock market
participation. Journal of Financial Economics, 101(2), 449–472.
Verdejo-Garcia, A., Bechara, A., Recknor, E. C., & Pérez-García, M. (2006). Executive
dysfunction in substance dependent individuals during drug use and abstinence: An
examination of the behavioral, cognitive and emotional correlates of addiction.
Neuropsychologia, 44(10), 1777–1786.
Xiao, J. J., & Porto, N. (2017). Financial education and financial satisfaction: Financial
literacy, behavior, and capability as mediators. International Journal of Bank Marketing,
35(5), 805–817.

http://dx.doi.org/10.22441/jurnal_mix.2022.v12i1.001 17