Abstract:
The primary objective of this research is to investigate the behavior of individual
investors in the context of stock market investments during Sri Lanka's economic crisis.
The study employs an extended version of the Theory of Planned Behavior (TPB) to
comprehensively understand the factors influencing individual investor decisions.
Utilizing a quantitative approach, the research aims to determine the better prediction
of this expanded TPB in predicting individual investor behavior amid economic
challenges. Data was collected through a systematic self-administered questionnaire
distributed to both existing and potential individual investors. The relationship between
variables was analyzed using Partial Least Squares Structural Equation Modeling
(PLS-SEM). The results demonstrated that, amid the economic crisis, the subjective
norms towards investing had the largest impact on individuals' intentions to participate
in the stock market and Risk avoidance and Uncertainty avoidance had a highly
significant influence on investor’s intentions. This research examined only current and
prospective Colombo stock market investors' investment intentions during Sri Lanka's
economic crisis. Few studies have attempted to include risk avoidance and uncertainty
avoidance within a decision-making framework and future studies focus on these
diverse market contexts. Owing to the economic downturn in Sri Lanka, the augmented
TPB put forth in this study has contributed valuable insights for financial professionals,
regulators, as well as existing and prospective investors. It furnishes a substantial
knowledge base to aid in making informed investment decisions. Furthermore, it offers
an expanded comprehension to existing and potential investors about the intricacies of
the relationship between investment intentions, thereby widening their perspective.
