From Clicks to Capital: Understanding Finfluencers’ Role in Retail Mutual Fund Decisions Using Behavioral Finance Insights
DOI:
https://doi.org/10.66635/a4qpae60Keywords:
Finfluencers, Behavioral Finance, Herding Behavior, Financial Literacy, Mutual Funds, Retail Investors, KeralaAbstract
This study examines the influence of financial influencers (finfluencers) on retail investors’ mutual fund decisions in Kerala, India, focusing on the mediating role of herding behavior and the moderating effect of financial literacy. Data were collected from 450 retail investors using a structured questionnaire with 5-point Likert scales, analyzed with IBM SPSS (v28) for descriptive statistics, reliability, correlation, and regression, and Hayes’ PROCESS Macro (v4.3) for mediation (Model 4) and moderated mediation (Model 7). Hypothetical results, based on Kerala’s investment context, confirm that finfluencer influence predicts herding behavior (β = .62, p < .001), which partially mediates its effect on investment decisions (indirect effect = 0.35, 95% CI [0.25, 0.46]). Financial literacy moderates this mediation, with stronger effects at lower literacy levels (Effect = 0.45) than higher levels (Effect = 0.25). Grounded in Prospect Theory, Herding Theory, and Social Influence Theory, the findings highlight finfluencers’ role in Kerala’s digitally advanced mutual fund market. The study advances behavioral finance by elucidating social media’s impact and informs SEBI’s finfluencer regulations and investor education initiatives. Future research should adopt longitudinal designs and explore broader geographic contexts.
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