1. A Study on Propensity to Indebtedness among Young Working Malays in Malaysia
- Author
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Abdullah, Mahdhir and Shukor, Syadiyah Abdul
- Subjects
Electronic commerce -- Usage ,Financial management -- Usage ,Marketing research -- Usage ,Consumer behavior -- Usage ,Teenagers -- Usage ,Youth -- Usage ,Mediation -- Usage ,Credit cards -- Usage ,Online payment services -- Usage ,Electronic commerce ,Company business management ,Company financing ,Online payment services ,Business - Abstract
Purpose: The purpose of this study is to investigate the factors that affect propensity to indebtedness among young working Malays in Malaysia. Individual indebtedness has been a phenomenon in Malaysia especially since the 2008 global financial crisis. Measured by household debt to gross domestic product (GDP), Malaysia experienced high levels of household debt of more than 80% since 2010. Consumption behaviour patterns have revolutionized in recent years where online shopping has been a norm. Online shopping has been made easy by reliable payment gateway including the use of credit card and buy-now-pay-later (BNPL) facilities. Furthermore, there is a constant offer and strong promotion of mega sales on online shopping sites. Design/methodology/approach: In this study, four variables are tested as predictors to propensity to indebtedness. They are money management skills, status consumption, susceptibility to interpersonal influence, and attitudes towards debt. The sample for this study consisted of 324 valid respondents who participated in a survey. The data was collected via online platform and physical. The data was analyzed using the partial least square structural equation modelling (PLS-SEM). Findings: The findings revealed that there is a substantive significant negative relationship between money management skills and attitudes towards debt. Status consumption and susceptibility to interpersonal influence substantively significantly affect attitudes towards debt positively. And attitudes towards debt significantly affects the propensity to indebtedness positively. For mediation, it has been found that attitudes towards debt mediated the relationship between all the three variables (money management skills, status consumption, and susceptibility to interpersonal influence) and propensity to indebtedness. Research limitations/implications: Further research may include socio demographic factors such as parental guide, other consumer behaviour factors such compulsive buying, and other financial factors such as access to credit as predictors to propensity to indebtedness. The research can also be extended to pre-retirement individuals as these people are also quite fragile in facing debt problem as they have short period of time to recover their indebtedness problem before they retire. Practical implications: The results could be used by regulators to control the high level of indebtedness among Malaysians, especially the young people. The government, through relevant agencies, may educate people about the importance of personal financial management and the risks of being over-indebted. Originality/value: The variables used in this study represent financial factors and consumer behaviour factors. Keywords: Individual Indebtedness, Attitudes Towards Debt, Money Management Skills, Status Consumption, Susceptibility to Interpersonal Influence, Introduction High household debt level has become an interesting topic of discussion especially after the 2008 global financial crisis. Measured by household debt as a percentage of the gross domestic [...]
- Published
- 2024