THE MEDIATING ROLE OF ATTITUDES IN TRADING COMPANIES' SHARES: BRAND FAMILIARITYAlthough a brand has been normally associated with a name and/or symbol-like logo, the trademark and package design that differentiate it from its competitor, its name is believed to be the primary brand factor. In this study, it is contended that a company name is important for investors’ evaluations of its brand benefits and hence conceptualized as an antecedent of consumers’ attitudes towards a brand. In the context of investment, investors have been found to incline towards investing in the companies that they are familiar with. For instance, when given an option to invest in one of many commercial banks, investors would tend to favour the bank with whom they have accounts.
Familiarity towards a company can also influence consumers’ perceived risk of the company because they use company-specific facts to arrive at their expectation as to risk and returns. Therefore, knowing the name of an investment becomes crucial, as it indicates the type, market and other specific characteristics of that particular share. For example, participants in the study of Kilka and Weber underestimated the riskiness of domestic shares relative to those of foreign shares.
When an investor’s familiarity of a company is high, their inclination to trust the company can also be expected. For instance, one may put more trust into a company because of knowing that a director of the company is a well-known national figure. Similarly, should a problem occur after owning a company share, an investor would find access to a familiar organization in order to lodge a query or complaint relatively easier and more convenient than with an unfamiliar organization.
The above arguments helped the study to test the following hypotheses related to FAM:
H5a: ‘brandfamiliarity’ is positively related to ‘attitude towards brand’
H5b: ‘brandfamiliarity’ is negatively related to ‘perceived risk’
H5c: ‘brandfamiliarity’ is positively related to ‘perceived trust’

This study is based on the concept of attitudes as having an important role in predicting users’ behaviours. Therefore, investors’ intention to trade in a company’s shares can be predicted by favourable attitudes formed towards that company’s brand as result of users’ positive evaluations on risk, returns and trust.
The intended unit of analysis in the present study is individual investors. However, since one of the main aims of the study was to validate a proposed model (internal validity), a proxy for individual investors was chosen. Important aspects such as knowledge, skills and involvement were carefully considered when selecting this proxy in order to also meet external validity. As a result, 341 students enrolled in the Investment and Portfolio Management subject at a major university in Victoria, Australia have been identified and selected as the study’s sample frame. From this sample frame, 136 usable responses were gathered during six weeks of administering the survey, wherein students answered in their own preferred time, not in a laboratory setting.
An online survey method was employed to collect respondents’ answers following a free simulation experiment. Online surveys are regarded as advantageous since they can overcome place and time constraints, whereas free simulation experiments avoid fictitious study cases. In this study, students were highly involved when completing the survey because they were also completing a share valuation assignment to mimic actual evaluation tasks of real investors. In completing the assignment, they were asked to obtain information from related avenues including the Australian Securities Exchange Website, financial portal Websites and the Websites of three companies listed on the Australian Securities Exchange (ASX) that were chosen for the experiment. This selection has followed a narrowing technique to avoid having too many companies but at the same time ensuring that these companies have certain differing characteristics such as size, industry types and brand familiarity.