FACTORS AFFECTING INVESTOR’S DECISION-MAKING IN SMALL AND MEDIUM ENTERPRISES IN PAKISTAN

Abstract

Purpose - The purpose of this study is to examine the impact of financial literacy on the investment decisions of the SME’s investors in Pakistan. Methods/Design - The data has been gathered through questionnaires, distributed among 220 SME’s investors. The gathered data was analyzed by using descriptive analysis, regression analysis and correlation analysis by using SPSS. Results/Findings - The results revealed that personal financial needs have the significant positive influence on the decision-making behavior of the investors in SME sector. While the advocate recommendations are being influencing negatively on the decisions of the SME’s investors. Whereas the accounting information does not have influence on the process of decision-making behavior of the investors. Originality – The present study contributes to the existing body of knowledge on investor’s behavior. Additionally, the results will be helpful for the government policymakers as well as for the management of the SMEs. For the potential investors, this study will also be very beneficial to make the right investment decisions.