Impact of Financial Parameters on Investment Decision in Securities Market of Pakistan: A Case Study of Pakistan stock Exchange

Abstract

This study investigates the impact of financial literacy parameters financial attitude, awareness, skills, experience, and capability on investment decisions in the securities market of Pakistan. While past research has often focused on individual financial factors, this study integrates multiple dimensions to address the growing need for comprehensive financial understanding among the salaried class in Karachi. A descriptive quantitative research design was adopted. Data were collected through a structured online questionnaire using purposive sampling, targeting salaried individuals from both public and private sectors. A total of 292 valid responses were analyzed using SPSS. Statistical tests such as reliability analysis, regression, ANOVA, and factor analysis were employed to validate the conceptual model. The study found that all five financial parameters have a positive and significant influence on investment decisions. Financial experience had the strongest effect (β = 0.247, p = 0.000), followed by financial skills and attitude. The model explained 37.4% of the variance in investment behavior (R² = 0.374), confirming all hypotheses. This study provides a localized, multi-dimensional framework for understanding investment behavior in an emerging market. It offers valuable insights for educators, policymakers, and financial institutions to design effective financial literacy interventions in Pakistan.