Determinants of Investment Behaviour in Higher Education: The Role of Financial Literacy, Digital Competence, and Mediating Mechanisms

Abstract

Financial literacy has emerged as a critical determinant of investment behaviour, particularly within higher education environments where students, faculty, and institutional stakeholders increasingly participate in complex financial markets. This review synthesizes theoretical foundations, conceptual models, and empirical evidence to examine how financial literacy comprising financial knowledge, attitude, and behaviour influences investment decision-making. Drawing upon human capital theory, behavioural finance, and the theory of planned behaviour, the study conceptualizes financial literacy as a multidimensional capability that enhances risk assessment, portfolio diversification, market participation, and long-term financial planning. The review further identifies key mediating variables such as financial self-efficacy and risk perception, along with moderating factors including socio-demographic characteristics, institutional exposure, and macroeconomic conditions. With the rapid expansion of fintech platforms and digital investment tools, digital financial literacy is recognized as an essential extension of traditional financial competence, shaping contemporary investment patterns. Empirical findings consistently demonstrate a positive association between financial literacy and informed, diversified, and sustainable investment behaviour within higher education settings. However, gaps remain in structured curriculum integration, longitudinal evidence, and digital behaviour analysis. The study underscores the need for comprehensive financial education frameworks in higher education institutions to foster financially resilient and investment-aware individuals, and proposes future research directions focusing on longitudinal assessment, fintech engagement, and policy-driven educational interventions.