Compulsive Buying in Gen Z: Does Financial Literacy a Substancial Mediators?

Abstract

As it is well known that gen Z and millennials are the most productive age range, it can be inferred that their investment and consumption activities drive Indonesia economic growth. Yet, it can’t be denied that consumption potentially caused compulsive buying behavior. Thus, this article aims to address the previous research gap which is still limited in comprehensively discussing individual factors of compulsive buying, financial literacy, financial decision and entrepreneurial orientation. This study aims to evaluate the effect of financial literacy on compulsive behaviour mediated by financial decision and moderated by entrepreneurial orientation. The sampling technique used was purposive sampling with certain criteria where questionnaires were distributed to 98 gen Z and millennial respondents who live in Jabodetabek and have several investment instruments. The data analysis uses structural equation modeling partial least square method. The results of this study are 1) financial literacy has a positive effect on investment decision, 2) investment decision has a positive effect on compulsive buying, 3) financial literacy has a negative effect on compulsive buying, 4) investment decision mediates the effect of financial literacy on compulsive buying and 5) entrepreneurial orientation does not moderate the effect of financial literacy on compulsive buying.