Digital Capital Market Dynamics: The Influence of Social Media Exposure on Gen Z Investment Decisions Mediated by Herding Behavior
Abstract
This study investigates the relationship between social media exposure and investment decisions, focusing on the mediating role of herding behavior among Generation Z university students in West Java, Indonesia. A quantitative cross-sectional survey was conducted among 400 students from 40 higher education institutions with university-based Investment Galleries. All respondents had previous or ongoing investment experience. Data were analyzed using covariance-based structural equation modeling (CB-SEM) with AMOS. The results revealed positive associations between social media exposure and herding behavior, as well as between herding behavior and investment decisions. The mediation analysis yielded an indirect effect of 0.328 and a direct effect of 0.210, resulting in a total effect of 0.538. The variance accounted for (VAF) was 60.9%, indicating that herding behavior accounted for a substantial proportion of the modeled relationship between social media exposure and investment decisions, while a direct association remained. These findings provide context-specific evidence of the role of herding behavior as a potential mediating mechanism in investment decision-making among Generation Z students who have access to formal capital-market education. The study contributes to behavioral finance research by highlighting the relevance of social influences in digital investment environments. The findings also suggest that university-based investment education should place greater emphasis on recognizing behavioral biases, critically evaluating financial information obtained through social media, and developing independent investment analysis skills. Given the cross-sectional design, the observed relationships should be interpreted as statistical associations rather than causal effects.
Keywords: social media exposure; herding behavior; investment decisions; Generation Z; behavioral finance; financial literacy; Indonesia.
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