Overall, the research model has satisfactorily explained the ultimate dependent variable, ‘INT_INV’ with 20% variance being explained. For hypothesized perceptual antecedents of attitude towards brand, only the perceived returns construct has a significant path effect on the attitudinal variable, whereas the relationship between perceived risk and attitude towards brand was found to be positive. Although the relationship between risk and attitude is not in line with the stated hypothesis, its t-statistic is just above the significance level and that the path effect may include the indirect effect from ‘trust’ on ‘attitude’ via the ‘risk’ variable. In addition, the brand familiarity construct is positively significant in affecting the attitude towards brand. ‘Trust’, on the other hand failed to predict the investors’ attitude towards a brand.
The findings of this study affirm that investors are users having specific informational needs including the need to adequately evaluate companies’ risks and returns. Such evaluation may precede their overall perception of companies’ performance and respective attitude towards the company tend to be formed before they can decide to invest in the company’s share. Although the 20% variance explained of the dependent variable seems moderate, this finding still support the claim in extant literature that investor behaviours may be emotionally biased (Aspara and Tikkanen, 2008). In conclusion, the present study has shown that in courting individual investors, companies may engage in marketing strategies that may enhance their image as viewed by investors, but at the same time need to remember that these investors still do their homework on evaluating the ‘worth’ of companies with regard to their financial implications and not entirely emotionally driven.
The findings of this study have important implications to both theoretical and practical considerations. First, it was found that a research model based on the concept of attitude as a mediator can be applied in the context of investors evaluating a company before deciding to invest in the company’s shares. Being human, investors are subject to emotion and this emotional effect can be stronger when companies are seen appealing to investors via their marketing strategies in strengthening their images. Therefore, investors’ attitudes towards companies’ brand can be expected to play an important role alongside cognitive evaluation of the companies’ financial performance in predicting their final behaviours of investing in the companies’ shares.
Second, there are specific perceptual antecedents to ‘attitude towards brand’ that shape investors’ overall affective evaluation of a particular brand. This study has conceptualized three cognitive evaluations of companies’ brand and a ‘brand familiarity’ variable which have resulted in the research model explaining 20% variance in the behavioural intention outcome, through attitudinal variable as a mediator. Among these three antecedents, only ‘perceived returns’ is significantly related to attitude towards brand, and as expected, ‘brand familiarity’ strongly predicts the attitudinal variable.
Third, from a pragmatic perspective, companies should continually engage in marketing strategies that may attract investors to invest in their shares more quickly than by only relying on good periodical financial results.
There are a few limitations to this study. First, the research setting for the study was an educational institution and respondents were limited to undergraduates enrolled in the Investment and Portfolio Management unit at a university in Victoria, Australia. As such, the study’s findings are limited due to the extent to which similar behaviours can be generalized to real investors could not be ascertained.
Second, the research model used in this study relied on a number of pre-identified antecedent variables of the attitudinal construct. As such, these antecedents explain only a portion of the variances in the attitudinal construct and in the outcome variable. There may be other factors which, although not part of this study, may have significant influence on respective attitudes and investors’ behaviours. Some examples include investors’ risk preference, the present economic condition and the different levels of their financial literacy. Therefore, future research may include these suggested variables in order to increase robustness of the findings.
Third, the study’s findings are based on a modest sample size of 136 responses. Future research may verify the findings of this study by employing a larger sample that will permit the use of covariance-based SEM.
This study has attempted to use a model based on the concept of attitudinal factor having a mediating role in predicting investors’ behaviour. Research on such behaviour via the lenses of emotional factors has been scarce; thus this study has provided some insights on the importance of investors’ attitudes being formed after evaluating a company and prior to their final intention to perform an investment activity. In particular, this study has shown that attitude towards brand can predict investors’ intention when it is combined with their common evaluation of the companies’ financial performance. Therefore, when designing and engaging in marketing strategies to build a strong brand equity, companies should remember not to overspend as the attitudinal factor plays only a moderate role in mediating the relationships of companies’ perceived financial performance and investors’ intention to trade.