Mediation Effect Of The Savings Behavior Between Investment Pattern And Orientation Towards Finance (ORTOFIN): A Structural Equation Modeling Approach

Abstract

Purpose: The aim and objective of this research paper was to find the mediation effect of Savings Behavior-Savings & Investment (SBSI), Saving Behavior-Cash Management (SBCSM), Saving Behavior-Credit Management (SBCRDM), and Saving Behavior-Insurance (SBINS) in between Investment Pattern-Risk Profiling (IPRP), and Orientation Towards Finance (ORTOFIN).

Design/methodology/approach: All the working people who save and invest money were the population for this study. The primary data were collected using web-based structured questionnaire. Under the pilot study 42 respondents, whereas for the main study 424 respondents were finalised.  The sub constructs of Saving Behaviour were considered as mediation latent variables, Investment Pattern was taken as independent latent variable whereas Orientation Towards Finance was taken as dependent latent variable. The Structural Equation Modeling Approach  was used to examine the relationship between mediating, independent and dependent latent variables. Before Applying the SEM approach, Reliability, Validity, Sampling Adequacy, and Confirmatory Factor Analysis were performed under the measurement of variables and scale development. All the model fit indices were also checked for good fit model of this study.

Findings- The study reveals that SBSI has no mediation between IPRP and ORTOFIN whereas all the other three construct SBCSM, SBCRDM, and SBINS have the partial mediation between IPRP and ORTOFIN. Since the highest change in the regression weight is 0.140 for the SBCSM, hence it can be concluded that SBCSM is the most influencing mediating latent variable in between IPRP and ORTOFIN.

Research limitations- The limitation in this research paper was the sample size which was collected during the COVID 19 pandemic period; therefore, it may be possible that results may vary after the COVID 19 pandemic.

Originality/value- This research paper analysis results were derived with the help of statistical package SPSS AMOS 23.0.