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| Modeling of West Java Citizens' Investment Preference Based on Structural Equation Modelling with Partial Least Square Approach
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Luthfiatun Nisa Fauzia Darmawan, Ardi Kurniawan, Nur Chamidah, Toha Saifudin
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Abstract:
In line with economic recovery, banks continue to collect Third Party Funds (DPK) to strengthen liquidity. Bank Indonesia announced that there was a slowdown in growth in all types of savings, including current accounts, savings, and deposits. Compared with other provinces, the characteristics of collecting DPK in West Java are relatively unique in current accounts. However, the slowdown in savings growth and the depth of deposit contraction also caused a slowdown in deposits in West Java. A person's behavior in saving funds is influenced by how that person generates income. So, investment decisions are determined by the composition of funding. If people change their investment preferences, where previously they kept their funding in banks and switched to other instruments, there will be a decrease in deposits. This research was conducted to study the modeling of investment preferences of the people of West Java which are influenced by government regulations, financial performance, and behavioral finance based on the Structural Equation Modeling method with the Partial Least Square Approach. This research uses primary data with data collection techniques using quota sampling obtained from 240 samples of West Javanese society. The results of this research show that the perception variable regarding financial performance has a significant effect on interest in investing in the money market and commodity markets. The perception variable regarding behavioral finance has a significant effect on interest in investing in the capital market, money market, and commodity market. The overall model value obtained using the Goodness of Fit Index method is 0,614618, which means that if the GoF value is ? 0,36 then the model has a high ability to explain the data so that overall, it can be said that the model formed is valid.
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