Behavioral Determinants and Cultural Cognition in Investment Decision-Making: Evidence from Vietnamese Retail Investors in an Emerging Digital Financial Ecosystem

Abstract

This research investigates the complex interplay between behavioral determinants and cultural cognition in shaping investment decision-making patterns among Vietnamese retail investors within the rapidly evolving digital financial ecosystem. Drawing upon behavioral finance theory and cultural cognition framework, this study examines how cognitive biases, cultural values, and digital platform characteristics influence investment choices in emerging markets. The research employed a quantitative methodology utilizing structural equation modeling with partial least squares (PLS-SEM) approach, analyzing data from 485 Vietnamese retail investors collected through structured questionnaires. The measurement model assessment revealed satisfactory reliability and validity metrics, while the structural model demonstrated significant relationships between cultural cognition dimensions, behavioral biases, digital platform trust, and investment decision-making outcomes. Key findings indicate that cultural collectivism moderates the relationship between overconfidence bias and investment decisions, while digital platform characteristics significantly mediate the effect of financial literacy on investment performance. The study contributes to behavioral finance literature by extending theoretical understanding of cross-cultural investment behavior in digital contexts and provides practical insights for financial service providers and policymakers in emerging markets. Results suggest that cultural cognition serves as a critical lens through which behavioral biases manifest in investment decisions, particularly within digitally-mediated financial environments.