NOVICE INVESTOR BEHAVIOR IN INDONESIA STOCK EXCHANGE: A COMPARATIVE STUDY BEFORE AND DURING COVID-19 PANDEMIC

Abstract

Novice investors have an important role in the Indonesian economy. The number of novice investor increased significantly. It is interesting to study the behavior of novice investors, considering that all their activities will ultimately affect investment and the economy as a whole. The purpose of this study is to determine what factors influence the investing behavior of novice investors and to see if there are any differences in the investing behavior of novice investors, before the Covid-19 Pandemic and during the Covid-19 Pandemic. This study is a quantitative study, that implements the planned behavior theory which interviewed 234 novice investors in Indonesia Stocks Exchange as respondents, who were selected using purposive sampling method. The variables used include attitude toward investment, subjective norms in investing, and perceived behavioral control in investing as independent variables. While investing intention and investing behavior as dependent variables. The data is processed and analyzed using Structural Equation Modelling (SEM) method. The results show that during the Covid-19 Pandemic, investor attitudes, subjective norms, and perceived behavioral control influenced investing intention of novice investors. While prior to the Covid-19 Pandemic, subjective norm did not influence on investing intention. Furthermore, in both periods investing intention influenced investing behavior of novice investors.