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The Relationship Between Financial Knowledge, Investment Strategy and Satisfaction From Pension Schemes: Evidence From India

Author

Listed:
  • Shallu Saini

    (University of Delhi)

  • Tejinder Sharma

    (Kurukshetra University)

  • Satyanarayana Parayitam

    (University of Massachusetts Dartmouth)

Abstract

This study aims to examine antecedents of the pension schemes in Indian context. The relationship between the factors underlying the perception of subscribers towards the pension plan: financial knowledge, investment strategy, and satisfaction of investors (employees) is examined. Further, the effect of financial security, future financial goals, risk appetite, and secured returns on the investment strategy and satisfaction are explored. After checking the measurement properties of the structured survey instrument using the structural equation modeling with Lisrel package, data collected from 480 employees working in various administrative units of a State in the northern part of India, were analyzed. The Hayes’s PROCESS was used in analyzing the moderated moderated-mediation complex model and the results reveal that (i) financial knowledge is positively related to (a) investment strategy, and (b) investor satisfaction. The investment strategy mediated the relationship between financial knowledge and employee satisfaction. Further, the results indicate that future financial goals (first moderator) and financial security (second moderator) moderated the relationship between financial knowledge and investor satisfaction mediated through investment strategy. The results also documented that risk appetite moderated the relationship between investment strategy and investor satisfaction; and secured returns moderated the relationship between financial knowledge and employee satisfaction. The novelty of this study stems from the three-way interaction between the financial knowledge, future financial goals, and financial security in influencing the financial strategy. The implications for research and practice are discussed.

Suggested Citation

  • Shallu Saini & Tejinder Sharma & Satyanarayana Parayitam, 2024. "The Relationship Between Financial Knowledge, Investment Strategy and Satisfaction From Pension Schemes: Evidence From India," Asia-Pacific Financial Markets, Springer;Japanese Association of Financial Economics and Engineering, vol. 31(1), pages 101-135, March.
    • Handle: RePEc:kap:apfinm:v:31:y:2024:i:1:d:10.1007_s10690-023-09408-9
    DOI: 10.1007/s10690-023-09408-9
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