Green Financial Literacy and Risk Perception in Sustainable Investment Behavior: A SEM–ANN Approach

Abstract

This study investigates the impact of Green Financial Literacy and Perceived Risk on Sustainable Investment Behavior, incorporating the mediating role of Investor Trust and the moderating effect of Environmental Concern. By applying a compatible method of Partial Least Squares Structural Equation Modeling (PLS-SEM) and an Artificial Neural Network (ANN) model, the researchers obtained information on 422 investors, both to study cause-and-effect leads, and to come up with predictions. The findings of PLS-SEM indicate that Green Financial Literacy, Financial Motivation, and Social Norms have positive significant effects on Investor Trust but the Perceived Risk has a negative effect. Sustainable Investment Behavior is highly likely to be predicted by Investor Trust, and Investor Trust mediates several paths. There is a strong moderating effect on this relation by Environmental Concern. These results are confirmed by ANN analysis that has determined major predictors and low values of RMSE. The two-way procedure provides an in-depth perception of the sustainable sources of investment and policy interventions that can aid it in green financing.