THE ROLE OF INFLUENCER MARKETING IN SHAPING INVESTMENT DECISIONS: A STUDY OF RETAIL INVESTORS IN THE DIGITAL AGE

Abstract

The growing infiltration of social media networks has altered the way the investment communication takes place, making influencer marketing an influential factor that decides how retail investors would make decisions in the digital era. This quantitative research survey examines how influencer marketing influences investment preferences of retail investors with specific focus on influencer credibility and trust being the most explanatory variables. The study is based on the concepts of the credibility of the source, social influence, and behavioral finance as its conceptualization assumes influencer marketing as an external informational stimulus that influences the attitudes of investors and their behavioral intentions. Based on survey-based data of the retail investors actively consuming financial content on social media, the study applies statistical methods to investigate the connection between influencer marketing exposure and making an investment decision. The results will be anticipated to yield empirical data that influencer credibility and perceived trustworthiness play an important role in the investment decisions of the retail investors. The present research can contribute to the existing body of research regarding digital finance in two aspects: it presents objective evidence on the impact of influencer-based financial communication on the investor behavior, as well as it provides the practical implications to the regulators, investors, and financial educators in terms of how to mitigate the risks of investment advice provided through social media.