Moderating Effect of Financial Literacy on Relationship between Anchoring and Investment Decision among SMEs in Nairobi County
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Date
2021-03-24
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Publisher
East African Journal of Business and Economics
Abstract
Moderating effect of Financial Literacy on Relationship between
Anchoring and Investment Decision among SMEs in Nairobi County. The
study was premised on the regrets theory. Methods/materials: The positivism
paradigm was deployed. The study adopts an explanatory research design. The
target population was 102,821 firm owners. A sample of 383 respondents was
selected using the stratified random sampling technique. Multiple hierarchical
linear regression models were used to establish moderating effects of financial
literacy. Findings: Anchoring factors positively influenced investment decision
(β = 0.173, p < 0.05). The study also found that financial literacy moderates
the relationship anchoring and investment decisions (β = .92, p > 0.05, ∆R
2 =
.07). Conclusion/Practical implication; Anchoring enhance investment
decisions among the small and medium enterprise. In addition, high financial
literacy improves the relationship between anchoring behaviour and investment
decisions among SMEs. This would enhance better decision investment
decisions improving the financial performance of the SMEs.
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Keywords
Anchoring, Financial Literacy, Investment Decision, SMEs