The objective of this paper is to construct and validate the Investor Susceptibility to Interpersonal Influence Scale (ISIIS).
In total, 19 items were initially developed on a seven-point Likert scale. Validation included expert assessment, exploratory factor analysis, confirmatory factor analysis and modeling. The sample contains 518 observations of Brazilian individual investors.
The procedures indicated that the scale has content, convergent and discriminant validity. The final investor susceptibility to interpersonal influence scale consists of 12 items distributed across the social learning and social utility dimensions.
The ISIIS can be useful both for researchers interested in studies related to social finance and for bank managers who wish to identify how their clients' investment decisions are influenced by social interactions. Even though it was developed considering Brazilian investors, researchers from other countries can adapt and apply the scale. It can also be used as an antecedent for other financial behaviors, such as risk-taking, herding, disposition effect and implications for financial literacy and financial well-being.
As yet, there is no consensus in the literature on the best way to measure social influences on investment decisions. We propose a simple and useful methodology for classifying investor susceptibility to interpersonal influence.
