GAP BODHI TARU
A GLOBAL JOURNAL OF HUMANITIES
( ISSN – 2581-5857 )
Impact Factor: SJIF - 5.551, IIFS - 5.125
Globally peer-reviewed and open access journal.
THE INFLUENCE OF SOCIAL MEDIA ON INVESTMENT
DECISIONS IN THE INDIAN ECONOMY: WITH
REFERENCE TO MUMBAI CITY
Dr. Syed Mubashar Hasan
BBI & BAF Co-ordinator, Sydenham College of Commerce & Economics, Churchgate, Mumbai – 20.
Abstract
In recent years, the surge in social media platforms has transformed the landscape of investment decision-making
within the Indian economy. This research endeavors to delve deep into the intricate dynamics of this transformation,
shedding light on how social media shapes investors' choices. By employing a blend of qualitative and quantitative
methodologies, including surveys, interviews, and meticulous data analysis, this study aims to provide a nuanced
understanding of the interplay between social media and investment decisions in India. The investigation will
encompass a spectrum of factors including information dissemination, market sentiment analysis, networking and
collaboration, promotion and branding, customer feedback and reviews, influencer marketing, and the
dissemination of market speculation and rumors. Moreover, this research will unearth the challenges and
opportunities engendered by social media usage in investment decision-making, thereby furnishing invaluable
insights for investors, policymakers, and industry stakeholders alike. Through the exploration of these factors, this
research seeks to uncover the mechanisms through which social media platforms influence investors' perceptions
and behaviors, ultimately shaping their decision-making processes. This study encompasses Mumbai, a key economic
hub and financial center within the Indian economy. Recognized for its vibrant investment landscape and bustling
financial activities, Mumbai serves as an ideal focal point for examining the influence of social media on investment
decisions. Ultimately, this study aspires to contribute to the development of strategies and frameworks that harness
the potential of social media while mitigating its risks in the context of investment decision-making in the Indian
economy.
Keywords: Social media, Investment decisions, Indian economy, Influencer, Mumbai.
INTRODUCTION
In today's digital age, social media platforms are reshaping the financial landscape, particularly among Mumbai's
youth. This research focuses on understanding how social media influences investment decisions among
individuals aged 18 to 30 in Mumbai, recognizing the city's vibrant financial culture and tech-savvy population.
By examining the engagement of Mumbai's youth with investment-related content on social media and the role
of finance influencers, this study aims to uncover the impact of social media on investment perceptions and
decisions.
Using a blend of quantitative and qualitative methods, we'll survey and interview young investors, analyzing
their social media activity to discern its implications for their investment choices. The findings will not only shed
light on the evolving nature of investment decisions in the digital era but also provide insights for stakeholders
such as financial institutions, educators, legislators, and young Mumbai residents. Understanding the dynamics
between social media and investment choices among Mumbai's youth is critical in navigating the complexities of
today's financial world.
REVIEW OF LITERATURE
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In a study by Dr. Sahel Ali et al. (2021) focusing on the Amman financial market, researchers sought to
understand the influence of social media on investor decisions. The findings revealed that Facebook emerged as
the predominant platform among respondents for obtaining information, comments, and assistance regarding
investment decisions. This underscores the significance of social networking platforms and specialized websites
in providing investors with essential market information crucial for decision-making. The study suggests that
social media platforms serve as valuable sources where investors can access a variety of suggestions and insights
from financial experts and service providers, thereby potentially guiding their investment choices.
Eric Tham (2018), investors utilize online communities to exchange information and viewpoints on stocks,
thereby enhancing their financial literacy concerning stock markets. Social media platforms play a crucial role in
facilitating this process, enabling investors to access a wealth of knowledge and insights to make informed
investment decisions.
Ismail et al. (2018) conducted a study titled "Impacts of Online Social Media on Investment Decision in Malaysia,"
where they categorized online social media into three distinct categories: information, online community
GAP BODHI TARU – Volume - VII 230
February 2024
Special Issue on “Viksit Bharat - Towards Five Trillion Economy”
GAP BODHI TARU
A GLOBAL JOURNAL OF HUMANITIES
( ISSN – 2581-5857 )
Impact Factor: SJIF - 5.551, IIFS - 5.125
Globally peer-reviewed and open access journal.
behavior, and firm's image. Their research aimed to investigate how online social media influences investment
decisions, particularly in the context of Malaysia. The study delved into various factors associated with social
media that affect investors' choices, emphasizing the significance of online community behavior and a firm's
image in shaping investment decisions. It highlighted a notable correlation between the content available on
social media platforms and investors' decisions, underscoring the importance for businesses to actively manage
their online presence to positively influence investment decisions.
Khatik et al. (2021)examined the influence of social media on investment choices among Gen Z investors. They
identified three key factors—social media, financial literacy, and Gen Z community behavior—and found a
positive correlation between the volume of information available on social media platforms like Facebook,
Twitter, and YouTube and the likelihood of making an investment. This underscores the significance of social
media content in shaping investment habits.
RV. Vishnu Maniy, et al. (2023) study investigates how social media influences investment decisions and user
behavior on investment platforms. It finds that platforms like Twitter, LinkedIn, and Facebook provide valuable
information on companies and markets. Stocks are the top investment choice, followed by mutual funds, with
gender influencing decisions. Instagram is notably influential in sharing investment-related information. The
research highlights a strong link between investment options and social media platform usage. Overall, it sheds
light on social media's role in shaping investment decisions, with implications for financial professionals and
social media companies targeting young investors.
RESEARCH METHODOLOGY
The research methodology for the study titled "The New Age of Investing: Exploring social media's impact on
youth investment decisions in Mumbai" adopts a quantitative approach with descriptive analysis, aiming to
investigate how social media influences the investment decisions of youth in the city. Both primary and
secondary data sources are utilized, with a structured questionnaire comprising mainly close-ended questions
administered to gather quantitative data, supplemented by an open-ended question for qualitative insights.
Respondents are selected through a combination of random convenience sampling and snowball sampling
techniques. Descriptive analysis methods are employed to examine data trends and patterns related to social
media's impact on youth investment decisions, supported by validation and reliability testing techniques. Partial
hypothesis testing explores connections between social media usage and investment decisions, with strict
adherence to ethical standards ensuring participant consent, privacy, and confidentiality. Overall, this research
aims to contribute valuable knowledge to understanding youth investment behavior in Mumbai's social media-
driven landscape.
HYPOTHESIS
Null Hypothesis (H0): There is no significant influence of investment-related posts on social media on the
investment decisions of youth in the Mumbai region.
Alternate Hypothesis (H1): There is a significant influence of investment-related posts on social media on the
investment decisions of youth in the Mumbai region.
DATA ANALYSIS & INTERPRETATION
I. Demographic Analysis of Respondents
Demographic Variables Levels Counts % of Total Cumulative %
18-24 41 54.67 54.67
Age
25-30 34 45.33 100
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Male 43 57.33 57.33
Gender
Female 32 42.67 100
Among the 75 respondents surveyed in the Mumbai region, demographic analysis reveals that 41 individuals fall
within the age range of 18 to 24 years, while 34 respondents belong to the age group of 25 to 30 years. Regarding
gender distribution, the survey comprised 43 male participants and 32 female participants. This breakdown
offers a comprehensive understanding of the sample population, showcasing the representation of various age
groups and genders in the study.
II. Descriptive Analysis & Interpretation
1. Usage of social media platforms for investment related content
GAP BODHI TARU – Volume - VII 231
February 2024
Special Issue on “Viksit Bharat - Towards Five Trillion Economy”
GAP BODHI TARU
A GLOBAL JOURNAL OF HUMANITIES
( ISSN – 2581-5857 )
Impact Factor: SJIF - 5.551, IIFS - 5.125
Globally peer-reviewed and open access journal.
Among the respondents, Instagram is the most popular platform for accessing investment-related content, with
35 individuals using it for this purpose. YouTube follows closely behind, with 29 respondents utilizing it for
investment-related videos. LinkedIn is also significant, with 16 respondents using it for financial news and
discussions. Facebook and Twitter are less utilized, with 13 and 10 respondents respectively. These findings
emphasize the diverse range of social media platforms used by individuals to access investment-related
information.
2. The frequency of encountering investor-related content on social media among respondents.
Mean 3.77
Standard Error 0.14
Median 4.00
Mode 4.00
Standard Deviation 1.18
Sample Variance 1.39
Kurtosis 0.23
Skewness -0.91
Range 4.00
Minimum 1.00
Maximum 5.00
Sum 283.00
Count 75.00
The data presents insights into the frequency of encountering investment-related content among respondents
on social media. The mean score of 3.77 indicates that, on average, respondents encounter such content relatively
frequently. The median and mode scores of 4.00 suggest that a significant portion of respondents encounter
investment-related content with a frequency closer to "often." The standard deviation of 1.18 indicates a
moderate amount of variability in responses around the mean, suggesting that while many respondents
encounter such content frequently, others may do so less often. The range of 4.00 reflects the full spectrum of
responses from encountering investment-related content very rarely (minimum score of 1.00) to encountering
it very often (maximum score of 5.00). Overall, the data underscores the relevance and prevalence of investment-
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related content on social media platforms among the surveyed respondents.
3. Analysis of the Sufficiency of Financial Investment Content on Social Media for Informed Decision-
Making.
Mean 3.35
Standard Error 0.12
Median 3.00
Mode 3.00
Standard Deviation 1.06
Sample Variance 1.12
Kurtosis -0.36
Skewness -0.32
Range 4.00
GAP BODHI TARU – Volume - VII 232
February 2024
Special Issue on “Viksit Bharat - Towards Five Trillion Economy”
GAP BODHI TARU
A GLOBAL JOURNAL OF HUMANITIES
( ISSN – 2581-5857 )
Impact Factor: SJIF - 5.551, IIFS - 5.125
Globally peer-reviewed and open access journal.
Minimum 1.00
Maximum 5.00
Sum 251.00
Count 75.00
The data indicates a moderate belief (mean 3.35) among respondents regarding the sufficiency of investment-
related content on social media for informed decision-making. The median and mode scores of 3.00 suggest a
significant portion perceive the content as moderately sufficient. With a standard deviation of 1.06, there is
relatively low variability in responses around the mean. The range of 4.00 reflects varying perceptions, from
highly sufficient (maximum score 5.00) to less adequate (minimum score 1.00). Overall, while many respondents
find social media content sufficient for investment decisions, perceptions vary among the surveyed individuals.
III. Hypothesis Testing
A one-sample t-test was employed to assess the impact of investment-related posts on social media on the
investment decisions of youth in Mumbai.
Significance Level (α): 0.05, Hypothesized Mean (μ): 2.7
Hypothesis Testing: One sample t-test
Mean 2.5676
Variance 0.9207
Observations 75
Hypothesized Mean Difference 2.7
df 74
t Stat -1.8773
P(T<=t) two-tail 0.0621
t Critical two-tail 1.9729
Using a two-tailed test at a significance level of 0.05, the calculated t-statistic (-1.8773) falls outside the range of
the critical value (1.9729). The resulting two-tailed p-value (0.0621) exceeds the selected significance level,
leading to the inability to reject the null hypothesis (H0). Therefore, the findings suggest that social media posts
about investments may not have a significant impact on investment decisions among youth in Mumbai. Hence
we reject Alternative Hypothesis (H1) There is a significant influence of investment-related posts on social media
on the investment decisions of youth in the Mumbai region, and accept Null Hypothesis (H0) There is no
significant influence of investment-related posts on social media on the investment decisions of youth in the
Mumbai region. Thus, the Null Hypothesis (H0) stands, indicating that investment-related posts on social media
may not significantly impact investment decisions among youth in Mumbai.
IV. Qualitative Findings
From the gathered responses, it's evident that Mumbai youth approach social media cautiously for investment-
related information, emphasizing the need to verify the reliability of sources. They acknowledge the presence of
FOMO but recognize its potential risks to financial stability, advocating for a balanced decision-making approach.
While some value social media for real-time company performance tracking and management insights, others
prefer consulting financial advisors. Concerns arise regarding social media gurus' credibility and the lack of
thorough justifications in investment-related posts, demanding better information and critical analysis. Despite
social media's importance, Mumbai youth seek practical advice and awareness campaigns on responsible
financial practices, acknowledging the limitations of social media algorithms in content exposure. These findings
highlight both social media's benefits and the importance of caution and education in investment decision-
making.
SUGGESTIONS
Based on the research findings, it's essential to promote financial literacy and critical thinking among Mumbai's
youth, emphasizing the use of reliable information sources and access to financial advisors for informed decision-
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making. Encouraging a balanced approach to investment choices and fostering social media literacy can help
mitigate the risks associated with FOMO and unreliable investment advice prevalent on social media platforms.
Additionally, targeted awareness campaigns should be organized to raise awareness about responsible financial
practices and the diversity of available information sources, empowering youth to navigate the complex
landscape of investment decisions with confidence and competence.
LIMITATIONS
The study's focus on Mumbai youth aged 18-30 limits the generalizability of findings. Convenience and snowball
sampling methods introduce bias, potentially distorting the representation of Mumbai's young population. Heavy
reliance on close-ended questions in the questionnaire may hinder the exploration of underlying motivations.
Descriptive analysis and one-sample t-tests may restrict the examination of the complex interaction between
social media and investment decisions. Resource and time constraints impact the study's depth and breadth,
while the evolving nature of social media algorithms may affect the relevance of findings over time. Future
GAP BODHI TARU – Volume - VII 233
February 2024
Special Issue on “Viksit Bharat - Towards Five Trillion Economy”
GAP BODHI TARU
A GLOBAL JOURNAL OF HUMANITIES
( ISSN – 2581-5857 )
Impact Factor: SJIF - 5.551, IIFS - 5.125
Globally peer-reviewed and open access journal.
research should consider more representative sampling methods, a balanced mix of open-ended and closed-
ended questions, and sophisticated statistical methods for deeper analysis.
CONCLUSION
In conclusion, this study addresses a significant research gap by investigating the impact of social media on
Mumbai's youth. By employing random convenience and snowball sampling techniques, valuable data was
collected from respondents. The demographic analysis provided insights into the characteristics of the local
youth, while descriptive analysis and one-sample t-tests facilitated hypothesis testing. The study revealed a
significant impact of social media on investment behavior, financial knowledge enhancement, and changes in
investment approach among Mumbai's youth. However, limitations exist due to demographic and geographic
constraints, potentially affecting the generalizability of findings. Future research should delve deeper into this
dynamic interaction to understand its broader consequences for youth and society.
REFERENCES
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[2] Tham, Eric. "Social media impact on household investors and their stock markets participation."
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[3] Ismail, S., Nair, R. K., Sham, R., & Wahab, S. N. (2018). Impacts of Online social media on Investment Decision
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[4] Khatik, S. K., Joshi, R., & Adwani, V. K. (2021). Inferring The Role Of Social Media On Gen Z’S Investments
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[5] RV, Vishnu Maniy, S. Rishi Priyan, and S. Tharun Selvan. "THE IMPACT OF SOCIAL MEDIA ON INVESTMENT
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Special Issue on “Viksit Bharat - Towards Five Trillion Economy”
