Emotional Intelligence, Risk Aversion, Locus of Control and Risky Investment Intentions

Abstract

The present study seeks to identify the three factors of emotional intelligence, risk aversion and locus of control over risky investment intentions, with the aim of assisting investors in making decisions that are more rational and examining the role of literacy and possible advice to investors to promote financial knowledge and understanding. The data were collected through a questionnaire and composed 219 individual investors. In order to achieve the objectives of the research, the method of structural equations modelling for direct hypotheses and hierarchical regression for indirect hypotheses were used. The results showed that emotional intelligence has no significant effect on risky investment intentions. In contrast, it was found that risk aversion can have a significant negative impact on risky investment intentions. It was also determined that the locus of control has no effect on risky investment intentions. The structural equations modeling is based on discover complex relationships between variables. Using this method helps to identify hidden relationships between components. Hierarchical regression method can also be useful to find the effects of variables. In this research, these two techniques have been used.

Keywords

• risky investment intentions
• emotional intelligence
• risk aversion
• locus of control