Students' perceived risk and investment intention: the effect of brand equity

Emerging markets bring out the question of motivation to include of new investors in the market for financial securities often arises. The purpose of this study is to analyze how brands influence the investment intention of young potential investors. Specifically, the relationship between consumer based brand equity - according to Aaker's multidimensional conceptualization -and investment intention, mediated by perceived risk, is analyzed. The study contributes to the literature in two ways: (1) based on the revision made, no study has analyzed Aaker's brand equity construct in investment decisions; (2) studies linking brand aspects to investment decisions have not examined the mediating role of perceived risk. Through an experiment, where perceived risk and investment intention in a famous brand were measured as differences from fictitious brands, the following results were found: (1) the investment intention in a famous brand is higher than in a non-famous one, once controlled for risk and return; (2) the higher the brand equity, the lesser the perceived risk of investing in the famous brand, and the higher the investment intention; (3) the perceived quality of a brand's products was the dimension by which the effect of brand equity is transmitted. Involvement with the investment task and cognitive ability, at an individual level, the relative size of comparable firms, and the risk and return of investment alternatives were introduced as control variables.