The Mediating Effect of Financial Trust, Financial Risk Attitude, and Perceived Return on the Relationship Between Financial Knowledge and Intention to Investment in the Saudi Stock Market

This study examines the effect of financial trust, attitude towards risk, and perceived return on the relationship between financial knowledge and intention to investment in the Saudi stock market. Based on literature, a conceptual framework was generated, and the relationships between its variables were built and tested with structural equation modeling (SEM). The sample included 233 potential investors in the Saudi stock market. The results indicated that there is a direct significant effect of objective knowledge on both financial trust and the intention to invest in the stock market. Also, there is a direct significant effect of subjective financial knowledge on each of the financial trust, the attitude towards risk, the perceived return, and the intention to invest in the stock market. Furthermore, there is a direct significant effect both the attitude towards risk and the perceived return on the intention to invest in the stock market. The results also indicated that there is an indirect significant effect of objective financial knowledge on the perceived return. Also, there is an indirect significant effect of subjective financial knowledge on each of the attitude towards risk, the perceived return, and the intention to invest in the stock market. Furthermore, there is an indirect significant effect of financial trust on the intention to invest in the stock market. While the rest of the relationships proposed in the study did not prove significant. This study provides research and practical recommendations.