Determinants of financial risk tolerance: Evidence from the Indonesian millennials

Suherman Suherman and Herni Kurniawati and Rosle Mohidin (2023) Determinants of financial risk tolerance: Evidence from the Indonesian millennials. Humanities and Social Sciences Letters, 11 (1). pp. 67-82. ISSN 2312-5659

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Abstract

The purpose of this study is to examine the level of Indonesian millennials’ financial risk tolerance and the effect of gender, family occupation background, geographical location and financial literacy on financial risk tolerance. This research applies a quantitative approach using primary data that were collected through questionnaires. The sample used for this survey comprises 410 university students from western (Java, Sumatra, Kalimantan) and eastern (Bali, Nusa Tenggara, Sulawesi, Maluku, Papua) parts of Indonesia. The online survey was distributed to various universities in Indonesia. The one-way ANOVA and multiple regression methods were used for the analysis. The results show that: 1) the level of Indonesian millennials’ risk tolerance is moderate, 2) the level of Indonesian millennials’ financial risk tolerance is different, 3) gender, geographical location and financial literacy significantly affect the financial risk tolerance, and 4) family occupation background does not significantly affect the financial risk tolerance. These findings offer managerial insights into business practices in the financial industry to develop individualized investment portfolios based on investors’ financial risk tolerance. In addition, financial advisors are recommended to offer relatively riskier financial products to millennials from West Indonesia and those with higher financial literacy.

Item Type:	Article
Keyword:	Family background, Financial literacy, Financial risk tolerance, Gender, Geographical location ,Indonesian millennials.
Subjects:	D World History and History Of Europe, Asia, Africa, Australia, New Zealand, Etc. > DS Asia > DS1-937 History of Asia > DS520-560.72 Southeast Asia > DS611-649 Indonesia (Dutch East Indies) H Social Sciences > HG Finance > HG1-9999 Finance
Department:	FACULTY > Faculty of Business, Economics and Accounting
Depositing User:	SITI AZIZAH BINTI IDRIS -
Date Deposited:	22 Aug 2023 10:06
Last Modified:	22 Aug 2023 10:06
URI:	https://eprints.ums.edu.my/id/eprint/36583

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