Examining the Impact of Economic and Non-Economic Variables on Willingness to Invest in the Indian Stock Market: A Structural Equation Modeling (SEM) Investigati

Abstract

This study delves into the diverse array of economic and non-economic elements shaping individuals' inclinationstowards investing in the Indian stock market. Utilizing a survey-based approach, data was collected from 400participants residing in the Hamirpur and Una districts of the mountainous Indian state of Himachal Pradesh.Utilizing Partial Least Squares Structural Equation Modeling (PLS-SEM), to explore the proposed relationshipsamong the variables, while confirmatory factor analyses were conducted to ascertain the interrelations among thevariables and validate the constructs. The findings of this research indicate that non-economic factors significantlyinfluence the individual’s willingness to invest in the Indian stock market, while economic factors demonstrate aninsignificant relationship with investors willingness in stocks. This underscores the potential of StructuralEquation Modeling (SEM) as a valuable instrument for dissecting the intricate interplay between variouseconomic and non-economic factors and an individual's inclination to invest in stocks. SEM offers a robustframework for evaluating complex theoretical models, allowing researchers to scrutinize both the direct andindirect impacts of multiple variables on investment decisions. In the realm of stock market investmentwillingness, SEM emerges as a potent tool for analyzing how non-economic factors sway investment inclinations.Present study aims to bridge this gap by investigating the relationship between individuals' investment towardsstock and their inclination to invest in the stock market. Focused on participants who invest in stock market, thisresearch represents an initial step towards understanding the non-economic underpinnings of investmentbehaviour in India. However, future research endeavours should encompass a broader demographic spectrum toprovide a more nuanced understanding of investor behaviour across different age groups and educationalbackgrounds.