Examining the impact of product involvement , subjective norm and perceived behavioral control on investment intentions of individual investors in Pakistan ”

This study aims to examine the impact of product involvement, subjective norm and perceived behavioral control on investment intentions of individual investors in Pakistan. The data were collected from 548 individual investors in Pakistan using systematic random sampling. The data analysis was done using descriptive and inferential statistics. The results of the analysis showed that product involvement and subjective norm have a significant impact on investment intention of individual investors in Pakistan. On the other hand, the perceived behavioral control appears as insignificant in influencing the investment intentions of individual investors. The results of the analysis can be helpful for the investment advisors in efforts to increase the level of involvement. They need to develop and promote customized investment portfolios for their customers that suit their risk profile, investment objectives and financial constraints. Yusnidah Ibrahim (Malaysia), Imran Arshad (Pakistan) BUSINESS PERSPECTIVES LLC “СPС “Business Perspectives” Hryhorii Skovoroda lane, 10, Sumy, 40022, Ukraine www.businessperspectives.org Examining the Impact of Product Involvement, Subjective Norm and Perceived Behavioral Control on Investment Intentions of Individual Investors in Pakistan Received on: 25th of September, 2017 Accepted on: 9th of December, 2017


INTRODUCTION
The stock market can be regarded as a system of human interactions. In investment perspectives, investors exchange information and discuss stocks with their neighbors, friends, relatives and colleagues. Investors seek advice on the investment option from advisors, bankers, analysts and planners before the actual investment. The involvement of various aspects in the investment decision-making, investment decision-making can be categorized as complex decision-making behavior (Hirschey & Nofsinger, 2008;Shanmugham & Ramya, 2012). Researchers in economic psychology and behavioral finance have recently become interested in the issue of how investors' subjective perceptions about companies may influence their decisions to invest in the companies' stocks, for example, Ang, Chua, and Jiang (2010), , Aspara (2013), MacGregor, Slovic, Dreman, and Berry (2000), Statman, Fisher, and Anginer (2008). Involvement of individuals in investment activities has been part of the popular debate surrounding investment habits in Pakistan. Specifically, there has been significant concern about the low savings in financial instruments as opposed to savings in gold and real estate. In Pakistan, market capitalization as a percentage of GDP was only 24.6% in the year 2015 as compared to 261.6% in Singapore, 135.8% in Malaysia, 113.4% in Thailand, 85.97% in India and 98.36% in China, as reported by National Inflation Association USA (2016) 1 . Investment levels across countries are still not up to normative standards (Guiso & Sodini, 2013). Amongst emerging economies, Pakistan is a good example where despite high savings rates and forward-looking regulations, there is very low penetration of individual in the stock market. According to Security Exchange Commission Pakistan (SECP, 2016) 2 report, with over 60% of the population living in the rural and semi-urban areas, the capital market has negligible outreach.
In the previous literature, various factors such as demographic profile of investors, risk tolerance level, psychological factors and consumer behavior factors (Aspara,  Among the factors that enhance investment intentions of the individual investor, product involvement appears as a most significant contributor as reported by Aspara (2013), Lim (2013). Laroche, Vinhal Nepomuceno, and Richard (2010) mentioned that higher involvement generates a stronger relationship between evaluation difficulty and perceived risk for the product category perspective and impact on investment decision-making. Moreover, in investment intention, Theory of Planned Behavior (TPB) provides a very strong theoretical model to predict behavioral intentions. The behavior, subjective norm, and perceived behavioral control are the significant three basic elements of TPB in explaining behavior that has been claimed in multiple studies (Sommer, 2011). As previously mentioned, application of psychological models to examine investors' decisions is an emerging subject in the field of behavioral finance. Cuong and Jian (2014), Pascual-Ezama, Scandroglio, and Gil-Gomez de Liaño (2014) are among few researchers who assessed the impact of TPB factors on investment behavior of individual investors. However, considering that the evidence-based findings are very limited in this subject matter, this research attempts to bridge this gap by applying the TPB in the capital market context.
The application of the TPB in the context of stock investment assumes that the general willingness and intention to invest in stock drive the actual purchase of stock. Furthermore, it is possible that individuals are more willing to purchase stock if their attitudes, subjective norm and perceived behavioral control are positive. It is possible that many of the consumer constructs that were found to have influenced complex purchase decisions are in fact applicable to study investment intentions.
It is critical to assess whether consumer behavior factors (product involvement) and psychological factors (subjective norm and perceived behavioral control) can significantly develop the investment intentions among individuals in Pakistan. These are the gaps in the body of knowledge of financial products which this study seeks to address. The current study aims to assess the impact of product involvement, subjective norm and perceived behavioral control on investment intentions of individual investors in Pakistan using Theory of Planned Behavior (TPB).

REVIEW OF LITERATURE AND HYPOTHESES DEVELOPMENT
This section reviewed the related literature on product involvement, subjective norm, perceived behavioral control and investment intentions and develops hypotheses based on the previous literature.

Investment intentions
Intentions are assumed to capture the motivational factors that influence a behavior and to indicate how hard people are willing to try or how much effort they would exert to perform the behavior (Ajzen, 1991). According to Ajzen (1991), as a general rule, the stronger the intention to engage in a behavior, the more likely should be its performance. Intention can thus be construed as a predictor of behavior. Several studies involving financial products have used investment intention as a dependent variable to measure the intention to invest ( Shefrin, 2002). The behavior of investor is considered as complex financial market procedure and it has remained the focus of present and past studies of capital market (Iqbal, Hussain, Latif, & Aslam, 2013). The behavior of investors has been studied from the perspective of institutional investors, as well as individual investors, and also from the perspective of domestic investors and foreign investors.
The main object of the investors' investment usually either capital appreciation or current income or balance of capital appreciation (Sultana, 2010). This study aims to study the investment intentions of the individual investors from the perspective of consumer behavior and psychological perspective.

Product involvement and investment intentions
Product involvement concept is viewed as a focal structure, imperative to the comprehension of decision-making behavior of the consumer (Chakravarti & Janiszewski, 2003). The personal relevance of an object in accordance with inherent interest, values and needs is referred to as involvement (Zaichkowsky, 1985). Thus, the importance, attachment, motivation or interest manifested towards an object is understood to be involvement. The consumers' level of familiarity with the product is proportional to the extent to which consumers rely on procedural fairness (Shehryar & Hunt, 2005).
In view of Aspara (2013), an individual's enduring perception that an object (in our case, a product category/domain) is intrinsically important or relevant to him personally, reflecting his identity and personal values. Aspara (2013) systematically examined that how investor's affective and subjective valuation of company's brand and products influenced the propensities of the investor to consider companies as investment targets. The personal relevance represented by particular products of the company had a negative impact on the consideration that single investor presents to substitute the investments targets while deciding to invest in the stock of the company. Effective assessment of individuals for the organization's brand positively affects his optimism regarding financial returns of the organization's stock. Moreover, to some extent, in spite of what prior studies suggest, an individual's knowledge with a specific organization's image as such does not diminish the thought he provides for option investment targets, nor is it connected to conceit about the financial returns of that organization's stock (Aspara, 2013).
Aspara, Olkkonen, Tikkanen, Moisander, and Parvinen (2008) suggest that an individual's "affinity" for a product category, implicating personal relevance and positive personal value, largely stems from the perception that the product category in question supports or represents such domains to which the individual attaches personal relevance and positive value. Consumers neither wish nor are able to exert a great deal of effort to process information in a low involvement situation (Chung & Zhao, 2003). In another vein, consideration of the congruence between brand image and self-concept is done by highly involved consumers ( Product involvement influences people's general approach to the consumer decision process (Clarke & Belk, 1979; Laurent & Kapferer, 1985). Involvement is also a key element in revealing an individual's identity or sense of self (Bei & Widdows, 1999;Traylor & Joseph, 1984). Studies have also shown that highly involved consumers possess sufficient information required in the decision-making process as compared to the low involved consumer with a particular product (Chaiken, 1980), which results in fewer alternative acceptance by the highly involved consumers (Petty, Cacioppo, & Goldman, 1981). Those consumers who are highly involved in a particular product have better knowledge about the product attributes as compared to less involved consumers. Moreover, highly involved consumer depicts greater ability to evaluate the products in terms In addition, Lim (2013) also examined various factors that impact on investor decision-making and found that product involvement has a significant impact on the investment decision-making. In Harrison (2016), it was reported that product involvement significant-ly impacts on the investment intentions of individual investors. In the process of investment decisionmaking, the involvement of the investors significantly affects the investment intentions of the investors. Highly involved investors may have more investment intention as compared to those with a low-level of involvement. This study also proposed that product involvement will have a significant impact on the investment intentions of individual investors. Based on the above discussion and past literature, this study postulates the following hypothesis.
H1: Product involvement will have a significant impact on investment intention of individual investors.

Subjective norm and investment intentions
Subjective norms is the results of the perception of what peers of groups who are important think about the particular behavior and the motivation to comply with these views (Ham, Jeger, & FrajmanIvković, 2015). In the investment decision perspective, East (1993) documented that investment intentions of a person are significantly influenced by the opinion of the family and friends. Moreover, wealthier investors were found to be interested in sustainable investment due to the positive image of society towards sustainable investment (Eurosif, 2012). It can be expected that there is perceived public pressure that leads to investment in the sustainable investment projects and subjective norms is supportive towards the intention to invest in sustainable investment opportunities (Paetzold & Busch, 2014).
In addition to that, subjective norm is the combination of the perceived expectations form relevant individuals and intentions to comply with the expectation of these important individuals.
Knowing beliefs of an individual can be important in knowing the attitude of the individual (Pohja, 2009 (2014) found the non-significant impact of the subjective norm on intentions. The current study based on the above discussion proposed that opinion of friends and family is of immense importance in collective culture such as Pakistan and proposed that subjective norm will significantly impact on investment intentions of individual investors in Pakistan. Based on the previous literature and above discussion, this current study formulates the following hypothesis.
H2: Subjective norm will have a significant impact on investment intention of individual investors.

Perceived behavioral control and investment intentions
In the current study, perceived behavioral control (PBC) has been proposed to have a significant influence on the investment intentions. In this study, perceived behavioral control has been referred to the ability of the investors to control over performing a particular behavior in stock investment context. Hamid (2014) stated that people's judgement is reflected by perceived behavioral control about their ability to perform judgements and behavior about independence over the decision to perform the behavior. When a person considers performing a particular behaviour, perceived behavioural control is the answer of the person to the question. There is an expectation of being motivated to perform the behaviour from people with high perceived behavioural control (Yzer, 2012).
According to Ajzen (2002), PBC could influence in two ways as claimed by the Theory of Planned behavior: the intention to perform behavior could be affected by PBC; also in a way dependent from the concerned intention, PBC could directly affect the behavior. The investors' process of decisionmaking and in their behaviour could be involved by these two control factors. The control factors could be internal or external. The external control factors are financial resources, time or partners' cooperation while the internal control factors are individual knowledge, experience and skills (Ajzen, 2005). Moreover, individuals who have high level of perceived behavioral control possess more willingness to perform or not perform a particular behavior, because PBC exert direct influence on the behavior of the individual (Ajzen, 2006) and lead to perform the particular behavior (Armitage & Conner, 2001), particularly when the behavior is not under volitional control and to the extent that it is an accurate reflection of actual behavioral control (Ajzen, 2002).
In addition, Fishbein and Ajzen (2011) explained that PBC describes the ability of an individual to have control, and perceived ease or difficulty in performing that particular behavior. In this essence, TPB argued that a positive attitude and subjective norm towards intention does not guarantee that an individual will perform the behavior if the control to perform the behavior is missing. PBC exists from personal and environmental factors such as having the skills and opportunities to engage in a particular behavior. In line with this, Armitage and Connor (2001) also described that in many studies, perceived behavioral control has improved the forecasting of intention. Furthermore, PBC accounted for significant amounts of variance in intention and behavior (Knabe, 2012).
In this perspective, Cuong

METHODOLOGY
This section elaborates the data collection procedures, instruments and data analysis techniques employed to achieve the objective of the current research.

Instruments
A questionnaire was developed as the research instrument. It consists of two sections. The first section asks about the demographic profile of respondent and second section elicited information about product involvement, subjective norm, perceived behavioral control and investment intentions of the individual investor.
The measures of the underlying constructs of the study were carefully chosen from previous literature in the field. The measure for product involvement was adapted from the study of Lim (2013) Furthermore, the measurement for investment intention was adopted from the study of Lim (2013), Allen, Gupta, and Monnier (2008).

Data collection
The data for the current research were collected from a sample of 548 individual investors from major cities of Pakistan which includes Lahore, Karachi, Sukkur, Multan and capital city Islamabad. The data collection was done using selfadministered questionnaire. The systematic random sampling was used to collect the data from the respondents. Registrar offices and Human Resource Departments were contacted to get the list of the employees and with the help of the concerned office, the employees were approached.
In a descriptive analysis of demographics of the respondents, it was found that among the respon-dents, 65% were male and 33% were female respondents. Among the respondents, of them mostl were from the age group 25-35 years and have an average income Rs. 25000 -Rs. 50,000. While the majority of the respondents hold a postgraduate degree. The detail on the demographic profile of respondents is given in Table 1.

Data analysis method
The proposed relationships in the model were tested using the structural model. The current study employed two-step approach as suggested by Anderson and Gerbing (1988). In the first step, a measurement model was run to test the reliability and validity of the constructs. After ensuring that the construct used is adequately reliable, the structural model was used to test the proposed hypotheses.
In the measurement model, CFA technique was used to assess the items of the constructs, and the items with lower factor loadings were removed. The construct reliability and validity were assessed using the criterion suggested by Fornell and Larcker (1981), in which the construct validity is assumed when the value of the composite reliability is 0.70 or above. The constructs will be assumed to have acceptable construct validity when the value of Average Variance Extracted (AVE) is 0.50 or above.
In the current study, both reliability construct validity and composite reliability were established, and all the constructs fulfilled the criterion given by Fornell and Larcker (1981). The structural model was run using AMOS 22.0. The properties of the constructs of the current research were examined in a variety of ways to ensure that the measurements fulfil the criteria and are suitable to measure the relationship between variables. The item having low factor loadings was removed in the process of structural modelling. In the results of the measurement model, all revised constructs fitted with the data and had acceptable values of reliability and convergent validity.

FINDINGS
In descriptive analysis of the data, it was found that the mean value of product involvement is 2.9284, which is in between disagree and neutral but more inclined towards neutral. The value indicates the neutral response of the response towards product involvement. It was also revealed that respondents also have neutral response towards subjective norm as the mean value is 2.9896. Moreover, the mean value of perceived behavioral control showed indicates that respondents are neither agree nor disagree on the statement for perceived behavioral response as indicated by a mean value of 2.8694. Furthermore, the respondents have a slight disagreement towards the statements of investment intentions. The mean value (2.3854) shows a response between disagree and neutral, but the value is more inclined towards disagree. The details are given in Table 2.
The measurement model using all constructs was estimated before estimating the structural model based on the suggestions of Anderson and Gerbing. The measurement model as shown in Figure 1 was significant based on the value of The results of reliability and validity test showed that all the constructs showed anadequate level of Cronbach's Alpha and AVE. For instance, AVE for PI (0.508), SN (0.529), PBC (0.514) and II (0.624), which showed that the value of AVE is above 0.50. Meanwhile, the reliability of the all constructs also greater than 0.70 as suggested by Fornell and Larcker (1981). The results of the measurement model in Table 2 indicated that constructs are sufficiently reliable for hypothesis testing.
Hypotheses testing was done with the help of SR model. The data were tested for the assumptions of the multiple regression. It was found that the data fulfil assumptions of normality, linearity and multicollinearity and suitable for hypotheses testing.
The results of the data analysis using the structural model as in Figure 2 showed that product involvement significantly impacts on the investment intention ( ) The results indicate that product involvement explains 28% of the variations in the investment intentions of the investors. Moreover, subjective norm also has a significant influence on investment intentions ( ) 400; 01 .
p . β = ≤ and the results indicate that 40% of the total variation in investment intention is explained by the subjective norm. shows that overall model explains 45% of the variation in the investment intention with product involvement, subjective norm and perceived behavioral control. Table 3 presents the results of the data analysis.

DISCUSSION
The current study aimed assess the impact of product involvement, subjective norm and perceived behavioral control on investment intentions of the individual investor. The finding revealed that hypothesis H 1 , which states that product involvement has a significant impact on investment intention, is supported by the collected data. Moreover, findings showed that H 2 , which states that subjective norm has a significant impact on investment intention, is also supported. Meanwhile H 3 , which states that perceived behavioral control will have a significant impact on the investment intentions of individual investor, also found support from the findings of the current study.
In this research, product involvement (H 1 ) has a significant influence on investment intentions of the individual investors. The results of the current study also supported with the previous studies such as Laroche et al. (2010), Lim (2013), Harrison (2016). In reference to this, the product involvement allows investors to get more information about the stocks and exhort positive impact on investment intention. The more the investor will be involved in the stocks, there will be more chances of increase in investment intentions.

CONCLUSION
In this study, product involvement, subjective norm are significant factors that impact on the investment intentions of the individual investors. It can be concluded that the subjective norm acts as a more significant factor to impact the investment intention and subjective norm has also more significant influence as compared to product knowledge. It can be concluded that investment intention of the individual investors can be shaped with the help of increasing involvement and influence of friends, family and important people around the investors.
This study provides empirical evidence on the importance of product involvement in enhancing the intention of individual investors. Stock exchange authorities and financial advisor should focus on the creative investment plan to attract and create awareness among the individual investors. As the results indicate that higher involvement will lead to higher intention to invest in stocks. The family and friends can play an important role in forming the investment intentions as investors live in a collective society in Pakistan. Individual investors should be involved in the stock investment awareness and involvement process to guide their peers and family members on investment in stocks. This way of creating involvement and peer pressure can enhance the investment intentions among individuals.