The earlier the better! Students’ interest and capital market investment in Tanzania

Abstract

Purpose This study aims to assess the impact of investment motivation, knowledge and risk on Tanzanian students’ interest in investing in the capital market. The study was inspired by the FinScope, 2023 report, which found that only 0.50% of 9,915 respondents were actively participating in capital markets. Design/methodology/approach The research used a quantitative approach, collecting data via a self-administered questionnaire from 263 students. A binary logistic regression model was used to test the hypotheses at the 0.05 significance level. Findings Investment risk and knowledge positively affect students’ interest in investing in capital markets. However, investment motivation showed a positive but insignificant influence on students’ desire to invest in capital markets. Research limitations/implications This study was limited to a single higher learning institution in Tanzania, a developing country. Additionally, the model used was binary logistic regression; hence, factors that might moderate the relationship were not accounted for. Therefore, future studies should aim at gaining insight into other factors profoundly influencing the interest of students to invest in capital markets, such as age, level of income, education level and many others, using a different model, preferably the structural equation modeling, by means of a larger, representative sample. Originality/value The study contributes to the theory of planned behavior by describing how students can begin to show interest in investing in capital markets earlier in the context of developing countries such as Tanzania.