THE INFLUENCE OF FINANCIAL LITERACY AND MULTIDIMENSIONAL RISK ON INVESTMENT DECISIONS OF SHARIA INVESTORS IN THE CAPITAL MARKET
Abstract
The development of the Islamic capital market in Indonesia shows great potential, but investor participation is still relatively low. This study aims to analyze the influence of financial literacy and multidimensional risk on investment decisions in the Islamic capital market. Multidimensional risk in this study includes risk propensity, risk attitude, risk capacity, and risk knowledge. The research was conducted at the Ulive Education Center Islamic Investment Gallery, which has been actively providing Islamic-based investment education. The method used was quantitative with a Partial Least Squares Structural Equation Modeling (PLS-SEM) approach, based on data from 140 respondents who had invested at least once. The results showed that financial literacy, risk attitude, risk capacity, and risk knowledge had a positive and significant effect on investment decisions. Meanwhile, risk propensity showed a positive but insignificant effect. These findings emphasize the importance of improving financial literacy and risk understanding to encourage wise investment decisions in the Islamic capital market.
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Baihaqqy, M. R. I., Disman, Nugraha, & Sari, M. (2020). The correlation between education level and understanding of financial literacy and its effect on investment decisions in capital markets. Journal of Education and E-Learning Research,7 (3), 306–313. https://doi.org/10.20448/journal.509.2020.73.306.313
Indonesia Stock Exchange. (2024). The Young Face of New Capital Market Investors. suit-baze. https://idx.co.id/
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Indonesia Stock Exchange. (2025b). Fatwas and Regulations. suit-baze. https://www.idx.co.id/
Indonesia Stock Exchange. (2025c). Investment Gallery. RDIS. https://rdis.idx.co.id/id/invest-galleries
Cordell, D. M. (2001). Riskpack: How to evaluate risk tolerance. Journal of Financial Planning, 14(16), 36–40.
Feng, X. (2025). Gender differences in behavioral bias and influencing investment decisions. Lecture Notes in Education Psychology and Public Media,81 (1), 218– 223. https://doi.org/10.54254/2753-7048/2025.21108
Fong, J. H., Koh, B. S. K., Mitchell, O. S., & Rohwedder, S. (2021). Financial literacy and financial decision-making at older ages. Pacific-Basin Finance Journal,65, 101481. https://doi.org/10.1016/j.pacfin.2020.101481
Hair, J. F., Black, W. C., Babin, B. J., & Anderson, R. E. (2019). Multivariate data analysis (Eighth edition). Cengage.
Hair, J. F., Hult, G. T. M., Ringle, C. M., & Sarstedt, M. (2022). A primer on partial least squares structural equation modeling (PLS-SEM) (Third edition, Vol. 38). SAGE Publications.
Harahap, S. B., Bustami, Y., & Syukrawati, S. (2021). The effect of financial literacy on interest in sharia stock investment: A case study of the IAIN Kerinci sharia investment gallery. Al Fiddhoh: Journal of Banking, Insurance, and Finance,2 (2), 75–82. https://doi.org/10.32939/fdh.v2i2.955
Ichsan, R., Moeljadi, M., Ratnawati, K., & Indrawati, N. K. (2025). The effect of risk knowledge and risk bearing towards investment decisions through risk preference and risk composure. Journal of Lifestyle and SDGs Review,5 (4
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Lathief, J. T. A., Kumaravel, S. C., Velnadar, R., Vijayan, R. V., & Parayitam, S. (2024). Quantifying risk in investment decision-making. Journal of Risk and Financial Management,17 (2)
León, A. K., & Pfeifer, C. (2017). Religious activity, risk-taking preferences and financial behavior: Empirical evidence from German survey data. Journal of Behavioral and Experimental Economics,69, 99–107. https://doi.org/10.1016/j.socec.2017.05.005
Lestari, I. P., Ginanjar, W., & Warokka, A. (2021). Multidimensional risk and religiosity towards Indonesian Muslims' sharia investment decision. Journal of Islamic Monetary Economics and Finance, 7 (2), 369–400. https://doi.org/10.21098/jimf.v7i2.1321
Mandagie, Y. R. O., Febrianti, M., & Fujianti, L. (2020). Analysis of the influence of financial literacy, investment experience, and risk tolerance on investment decisions (case study of accounting students at Pancasila University). RELEVAN: Accounting Research Journal,1 (1), 35–47. https://doi.org/10.35814/relevan.v1i1.1814
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Nicolini, G., & Leonelli, L. (2021). Financial frauds on payment cards: The role of financial literacy and financial education. The International Review of Financial Consumers, 6(1), 1–33.
Financial Services Authority. (2024). National Survey of. https://ojk.go.id/id/berita dan-kegiatan/publikasi/Pages/Survei-Nasional-Literasi-dan-Inklusi-Keuangan- (SNLIK)-2024.aspx
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Safitri, D., Rahmawati, T., & Maftukhin, M. (2024). The influence of financial literacy, financial behavior, and income on the interest of the millennial generation in Brebes in investing. Jurnal Rimba: Business Management and Accounting Research, 2 (2), 127–138. https://doi.org/10.61132/rimba.v2i2.699
Siregar, D. K., & Anggraeni, D. R. (2022). The influence of financial literacy and financial behavior on students' investment decisions. Bussman Journal: Indonesian Journal of Business and Management,2 (1), 96–112. https://doi.org/10.53363/buss.v2i1.39
Sonu, S. S. (2023). Public preferences toward Ponzi scheme investments. Journal of Economics and Islamic Economics, 3(1), 106–120.
Triana, O. F., & Yudiantoro, D. (2022). The influence of financial literacy, investment knowledge, and motivation on students' investment decisions in the Islamic capital market. SERAMBI: Journal of Islamic Economics,4 (1), 21–32. https://doi.org/10.36407/serambi.v4i1.517
Ulive. (2025). Sharia Capital Market Mastery. Sharia Capital Market Mastery. https://ulive.orderonline.id/page/scmm
Wahl, I., & Kirchler, E. (2020). Risk screening on the financial market (risc-fm): A tool to assess investors’ financial risk tolerance. Cogent Psychology,7 (1), 1714108. https://doi.org/10.1080/23311908.2020.1714108
Published
2025-10-16
How to Cite
SYAHIDAH, Hilyah; MUTASOWIFIN, Ali.
THE INFLUENCE OF FINANCIAL LITERACY AND MULTIDIMENSIONAL RISK ON INVESTMENT DECISIONS OF SHARIA INVESTORS IN THE CAPITAL MARKET.
Proceedings of the International Conference of Islamic Economics and Business (ICONIES), [S.l.], v. 11, n. 1, p. 1635-1648, oct. 2025.
ISSN 2541-3333.
Available at: <https://conferences.uin-malang.ac.id/index.php/iconies/article/view/3454>. Date accessed: 12 may 2026.
Section
Articles
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