Financial and digital literacy effects on digital investment decision mediated by perceived socio-economic status

. This research aimed to examine the effects of financial and digital literacy as a fundamental aspect that influence the decision in making digital investment which is mediated by perceived socio-economic status. Prior research of how socio-economic affects digital and financial literacy which influence investment decision making process has widely been discussed over the time. However, most studies were focused on ‘objective’ socio-economic status as a part of a measurable factor which affects literacy level. On the other hand, there is another key element that needs to be deepened further, that is ‘perceived’ socio-economic status. In addition, specific discussion on ‘digital’ investment decisions and how it is influenced by the perception of digital investors which correlated with digital and financial literacy factors are also still limited. The trend of digital investors has risen along with the growing financial technology market, especially for millennials. This study’s results will contribute to policy makers, digital investors, and especially for digital investment companies to formulate go-to-market strategy. This research used a convenient sampling and gathered data through an online questionnaire survey from 116 individual investors. Multiple regression using SmartPLS version 4.0 was applied to analyze the data and test the research model. The results show that financial literacy and digital literacy positively affects digital investment decision throughout perceived socio-economic status as a mediator that also has a positive impact to digital investment decision.


Introduction
Digital is inevitable, technology has developed and influenced a lot of things in human-life, and the world of finance is no exception.Financial market is also rapidly changing with a breakthrough to innovate financial products and services.Nowadays, Digital Financial Literacy (DFL) is very important to enable knowledge that affects financial decisions to allocate their resources better and gain greater advantage.People with better financial knowledge will be more likely to invest in financial markets and can have more accurate consideration to reduce risk in markets.Furthermore, the exponential growth in financial technology is changing the way people handle their financial investments.
In 2021, Indonesia's economic value is recorded at around USD 70 billion and estimated to reach up to USD 146 billion in 2025 [1].D-Insights (2022) coined a report from E-conomy revealed that Indonesia contribute around 40% to the ASEAN-6 internet economy.It also highlights a report from APJII that pandemic of Covid-19 has accelerated the digital adoption which reflected through the trend of internet penetration growth from 65% in 2018 to 77% in 2021 -2022.However, the level of financial literacy is still relatively low, at 38,03% and the digital literacy index is 3,49% only [2].
The World Bank Report (2021) provides a use case of the key bottleneck of e-commerce to expand and the digital economy was correlated with the lack of trust in digital transactions and the impact of low adoption of digital financial services in Indonesia.The report found that only 0.5% of all Indonesian households are advanced digital financial service users (which include insurance, remittances, and credit).Most low and middle-income countries face this issue, as literacy is a critical component of digital financial access and inclusivity.The lack of understanding and knowledge of financial services has a significant impact, because most people are only familiar with basic banking services such as deposits and withdrawals [3].A case in Vietnam showed that lower financial literacy can also be associated with several factors, such as socioeconomic and culture.For example, people of higher age, low income, and non-users of financial management applications had lower financial literacy [4].A research study in India also revealed that education and age are determinant aspects which impact the level of financial literacy [5].
Accordingly, all the research above is more specific to study about the level of financial literacy while having a limitation to focus on the digital-related aspect and its impact to the digital investment decision.Therefore, this research aimed to examine the effects of financial and 2 Literature review

Digital Literacy
Digital literacy enables a person to use and interpret information received across digital sources [6].There are two key components in Digital Literacy (DL) that is information literacy which refers to how to effectively find relevant information online, and digital skills which consist of basic digital knowledge and competencies to utilize digital media as well as reach information literacy [7] A digitally literate person should be able to use modern digital technologies in acquiring information, navigate through intricate informational web, how to read and understand messages on digital media, and how to use these technologies to contribute to the digital information economy.
Based on the above discussions, a hypothesis was formulated as follow: H1: Digital Literacy will positively influence Perceived Socio-Economic Status which affect Digital Investment Decision.

Financial Literacy
Financial literacy refers to the ability to comprehend and examine options for savings, prepare for the future, and to respond appropriately to the situations which offer successful financial experience, such as in buying decisions, correct investing as well as improving wealth [8].Financial decisions, both short and long-term, are all impacted by financial literacy which has impacts on both the individual and society [9].Individuals who are financially literate are better able to make decisions and maintain their financial stability meanwhile it encourages inclusive growth and stronger financial systems and economies [10].Financial literacy enabled individuals to have more assets financially in general [11].During pandemics, being financially literate will help individuals to avoid problems related to financial issues, manageable income, and stressful situations [12].Based on the above discussions, a hypothesis was formulated as follow: H2: Financial Literacy will positively influence Perceived Socio-Economic Status which affect Digital Investment Decision.

Perceived Socio-Economic Status
The concept of Perceived Socio-Economic Status (PSES) can be defined as the subjective assessment of a person about their social and economic position within a community [13].The Socio-Economic Status (SES) itself aimed to capture the big picture of different levels within society [14].On the other hand, the hierarchy level of social positions reflects the reputation of a person.Several factors of SES such as sex, age, and specialization have implications toward different relationships of financial skills, knowledge, financial decision and any other impacts [15].The relationship between reflective economic outcomes and financial literacy underlie the question of how its importance to financial wealth of individuals as heterogeneity of financial literacy treatment affects household income, gender, and the level of education [16].Interestingly, the study revealed that being more financially literate does not necessarily improve perceived economic well-being.The variable of PSES covered a wide-range of studies.Most of previous studies discussed about PSES in correlation with psychological and social issues, such as about people behavior [17], healthy learning mind [18], and financial literacy but more into perceived economic outcomes [16].
Based on the above discussions, a hypothesis was formulated as follow: H3: Perceived Socio-Economic Status will mediate the relationship between Digital and Financial Literacy with Digital Investment Decision.
Figure 1 below presents the research model in accordance with above mentioned three hypothesis:

Methodology
The table 1 below are methodological issues that researchers considered to answer the hypothesis described above.

Data collection
The process of data collection in this research will leverage online questionnaires with a convenient sampling of DKI Jakarta citizens which represent the urban population in Indonesia.The reason behind DKI Jakarta citizens as main sampling target is due to the research focus on more advanced financial products that is digital investment.More specific requirements of respondents are individual digital investors, in productive or working age with range in between less than 21 to above 55 years old, education level should be at least Senior High School graduate, and has average monthly spending with measurement between less than IDR 5 million to above IDR 30 million.
The number of respondents are expected to reach 200 total respondents.The questionnaire will be divided into two sections which is first section to gather the profile of respondents and the second section is research questions that will be divide into four parts which consist of 5 (five) questions for each part (perceived socio-economic status, digital literacy, financial literacy, and digital investment decision) to determine the digital investment decision of DKI Jakarta citizens using a five-point Likert scale ranging from 1 (strongly disagree) to 5 (strongly agree).

Respondent Profile
From the expected number of total respondents, there are 116 respondent answers that will be used for further analysis.The sample used to capture demographic profile in this research consists of male (43%) and female (57%) with most of the respondents are between 21 -34 years old (61%) which is followed by 35 -45 years old (30%).The education level of respondents are mostly bachelor degrees (80%), and average monthly spending is ranging from IDR 5,1 million to IDR 15 million (40%) and followed by less than IDR 5 million (33%).In terms of working type, most of the respondents are working as employees in private companies (85%).The details of the sample profile are shown in Table 2.

Results and discussions
Variables and indicators from the questionnaire have been tested to check its reliability, convergent validity, and discriminant validity.

Variable Descriptive Statistic
The variable descriptive statistic assessment was calculated to examine standard deviation of each indicator as shown in Table 3.The mean of all indicators between 3.5 and 4.1 and the standard deviation of all indicators between 0.7 and 1.1.

Reliability and Validity
The outer factor loading assessment was calculated to evaluate the correlation between indicator and its construct with the result as shown in Table 4 and the reliability and validity assessment was calculated to test internal consistency as shown in Table 5.The ideal result of outer factor loading should be greater than the minimum threshold of 0.7 to test the correlation.Then the researchers have taken out some indicators that not fulfilled the criteria from the previous outer loading results (DID 1 & DID 3, DL 2 & DL 2, and PSES 1 & PSES 2).However, after recalculate the factor loading, the lowest indicators such as PSES4 (0.402) and PSES5 (0.446) are still remaining shown the limitation of this research.Compared to other indicators, Financial Literacy (FL) indicators are the most significant as the value for FL1 (0.856), FL2 (0.858), FL3 (0.784), FL4 (0.870), and FL5 (0.804).
The assessment of internal consistency of each item or variable to evaluate data reliability was conducted by using Cronbach's Alpha with standard minimum value of 0.70 [23].The result showed that the variables were reliable as the values are above the threshold value 0.70, except for PSES.

Discriminant Validity: Fornell-Lacker
The fornell-larcker assessment was calculated to examine discriminant as shown in Table 6.Fornell-Larcker was used to assess discriminant validity toward constructs by comparing the square root of each Average Variance Extracted (AVE) and correlations between constructs.As Fornell-Larcker measurement was referred to whether AVE values are higher than the correlations between constructs, hence it will show a positive discriminant validity.However, based on the result, it showed that AVE values are lower than the correlations between constructs.

Hypothesis Results
The calculation was conducted to test the relationship among variables of DL, FL, PSES, and DID as show in Figure 2.
There is positive impact of Digital Literacy and Financial Literacy to Perceived Socio-Economic Status (p-value < 0.05).There is also positive impact between Perceived Socio-Economic Status and Digital Investment Decision (p-value < 0.05).Therefore, Perceived Socio-Economic Status positively mediating Digital Literacy and Financial Literacy to Digital Investment Decision.
In terms of significant values of the correlation among variables, it showed that the correlation is positive with values of DL to PSES (0.165), FL to PSES (0.763), and PSES to DID (0.955).

Discussion
This research aimed to examine the effects of both financial literacy and digital literacy to digital investment decision which is mediated by perceived socio-economic status.For this study we considered that perceived socioeconomic status will strengthen the financial literacy and digital literacy effect to the digital investment decision.However, the result shows that there are positive impact amongst the variables but the digital literacy and perceived socio-economic status correlation are less significant.

Theoritical Implications
The research suggests the first hypothesis that Digital

Managerial Implications
Regarding to the results, digital investment company should consider financial literacy and digital literacy of the people to set the target market of their product and also formulate go-to-market strategy.For the perceived socioeconomic factor, it still need to studied further in order to make a clearer indicator of how people perceive themselves.

Limitations and future research
This study has a limitation.There are some indicators that not correlate well which are PSES4 and PSES5, the reliability for the variable Perceived Socio-Economic Status (PSES) is also pretty low.This variable is heavily relied on perception of the respondent to assess themself whether they feel socially and economically higher or lower compared to others.We suggest that the future research adding more indicators to analyze the correlation of this variable.The future research also can broaden the area of research to other big cities outside DKI Jakarta, such as Surabaya, Medan, and Semarang and bigger number of respondents to improve the findings.

Conclusion
In this digital era where many transactions including investment can be done digitally, it becomes important for interested parties to delve deeper into the factors that can influence one's digital investment decisions.And the result of this research indicates that financial literacy and digital literacy positively affects digital investment decision throughout perceived socio-economic status as a mediator that also has a positive impact to digital investment decision.

Table 2 .
Sample Profile

Table 4 .
Outer Factor Loading Results

Table 6 .
Discriminant Validity: Fornell-Larcker Literacy will positively influence Perceived Socio-Economic Status which affect Digital Investment Decision.The result shows that Digital Literacy positively impacts Perceived Socio-Economic Status.The second hypothesis states that Financial Literacy will positively influence Perceived Socio-Economic Status which affect Digital Investment Decision.The finding obtains Financial Literacy positively impacts Perceived Socio-Economic Status.The last hypothesis states that Perceived Socio-Economic Status will mediate the relationship between Digital and Financial Literacy with Digital Investment Decision.The finding similar with what has suggested, it shows that Financial & Digital Literacy positively impact the Perceived Socio-Economic Status to affect the Digital Investment Decision.