The effects of cultural value orientations on financial investment decisions of individual investors

The purpose of this study is to analyze how cultural value orientations, risk attitude and perceived financial efficiency play a role in the financial investment decisions of individual investors. As a result of the study, it is planned to reveal the effects of cultural value orientations and social norms, components of the theory of planned behavior, perceived behavioral control structures, risk tolerance and perceived financial competence on individual investor decisions. Our main hypothesis is that contrary to the predictions of conventional finance theory, cultural and cognitive factors are also influential in individual investor behavior. In this respect, the study also aims to develop an alternative approach to the generally accepted approach of conventional portfolio theory. The variables of intention to participate in the stock market, risk attitude, social norms and level of perceived financial efficiency, which are used as dependent variables in the study, are explained by the independent variable of cultural value orientations. In the practical part of the study, data were collected from 423 participants to determine the investment decisions of individuals in parallel with the purpose of the study. In this study, statistical analysis test techniques were used such as frequency analysis, descriptive statistics, normality tests; independent groups t test and one-way ANOVA tests were used for comparison analysis. The relations between variables were analyzed with Pearson Correlation test. The variables were examined by Confirmatory Factor Analysis (CFA) using the AMOS (Analysis of Moment Structures) program to test whether the variables have a structural validity of SEM (structural equation model). As a result of CFA, it was determined that these factors provided the construct validity according to the fit indices. The model whose construct validity was proved was subjected to Path Analysis using AMOS program and it was tested whether the model was significant or not. According to the research findings, power distance, collectivism/individualism and perceived financial efficiency have direct effects on stock market participation; masculinity/femininity, collectivism/individualism and social norms have direct effects on perceived financial efficiency; collectivism/individualism and uncertainty avoidance have direct effects on social norms. According to the findings, there is a positive and significant relationship between cultural value orientation dimensions and individual investors' risk attitudes and perceived financial efficiency. In conclusion, the empirical findings support the main hypothesis of the study.