Financial Self-Efficacy: Mediating Financial Literacy and Investment Behaviour among Private Sector Employees

Abstract

With the advancement in the world of finance, individuals working at all levels are inclined towards financial self-efficacy. There are huge opportunities of investments in the stock market which if invested by self-informed and financially literate individual can earn handsome returns from their investments. But again, being literate does not guarantee financial literacy and that is why employees find it challenging to make financial decisions on their own.  This study evaluates financial literacy and financial investments in stock market by the private sector employees using financial self-efficacy as the mediating variable using Baron and Kenny method of mediation (1986). The study is conducted with a sample of 200 private sector employees from National capital region (NCR), India selected by using simple random sampling method. The result found that there is significant impact of financial literacy on the financial investment decision of the employees in the stock market. The study also found that financial self-efficacy perfectly mediates the association between financial literacy and financial investments in stock market by the respondents.