The stock market helps in channelising the savings to the companies, thereby providing the necessary capital to the companies and economies to grow. The stock markets have reached their ever-highest level, and when the stock market is green and bullish, and study aims to explore investors’ motives to invest in the stock market. The study aims to develop a model incorporating attitude and subjective norms from the theory of planned behaviour (TPB) along with expected return, dividends and financial literacy in investigating the motives of investors to invest in the stock market in India.
Quantitative data were collected using a survey method where 280 questionnaires were sent, and 195 useable questionnaires were returned, thus yielding a response of 77.38%. The respondents were individual investors who were investing in the stock market in all regions of India. The constructs were analysed using exploratory factor analysis and the model was developed using partial least squares structural equation modelling (PLS-SEM).
The study found that attitude, expected returns and financial literacy have a direct and positive impact, while subjective norms and dividends are not strong predictors of investors’ motives to invest in the stock market. The R2 of the model is 0.409, which gives an acceptable predictability of the independent variables of the investor's motives to invest in the stock market.
The study was conducted in an emerging economy, namely India; therefore, the results of the study may not apply to other developed nations. In addition to this, the study is conducted when the stock markets are at their peak; a similar study at different times may yield different results.
The results of the study offer managerial implications to companies and financial advisors by providing insights into the motives of investors to invest in the stock market. This can further help in increasing the retail participation of investors in the stock market. Policymakers can take a cue from the study's results and organise seminars and discussions to promote financial literacy, which will help more investors invest in the stock market.
The economy can grow if it can direct the savings of individuals towards the formation of capital by providing a platform. Thus, the study has social value as it helps in unearthing the motives of investors to invest in the stock market.
The study and its results are important to the body of knowledge as they explored the motives of investors, and to the best of the author's knowledge, no study has studied motives in the emerging countries. The study shows that dividend is not a motive to invest in the stock market, which is the study's unique contribution.
