Title: Social Network Effects Drive Investment Behaviour: Empirical Evidence from Vietnam's Emerging Financial Market
Authors: Quang Minh NGUYEN
Volume: 9
Issue: 9
Pages: 148-161
Publication Date: 2025/09/28
Abstract:
This study investigates the mechanisms through which social network effects influence individual investment behaviour within Vietnam's rapidly evolving financial market context. Drawing upon social learning theory and behavioural finance frameworks, the research develops a comprehensive theoretical model examining the relationships between peer influence, social network density, information transmission quality, and investment decision-making patterns. The study employs a mixed-methods approach, combining structural equation modelling (SEM) using partial least squares (PLS) methodology with fuzzy-set qualitative comparative analysis (fsQCA) to analyse data collected from 387 individual investors across major Vietnamese financial centres. The findings demonstrate that social network effects significantly mediate the relationship between peer influence and investment behaviour, with network density serving as a crucial moderating variable. Information transmission quality emerges as a critical pathway through which social networks affect investment decisions, whilst trust mechanisms within networks substantially enhance the magnitude of these effects. The fsQCA analysis reveals multiple configurational pathways leading to optimal investment behaviour, highlighting the complex, non-linear nature of social influence processes. These findings contribute to behavioural finance literature by providing empirical evidence of social network mechanisms in an emerging market context, whilst offering practical implications for financial market development and investor education initiatives in transitional economies.