Online investment self-efficacy: development and initial test of an instrument to assess perceived online investing abilities

This paper develops and tests an instrument to measure online investment self-efficacy, defined as an individual´s perceived ability to utilize online technologies to accomplish investing-related tasks. A series of empirical studies were conducted to establish the measure´s psychometric properties. The results suggest that the measure exhibits admirable levels of reliability, as well as convergent, discriminant, and nomological validity. As predicted by theory, computer self-efficacy was found to serve as an important precursor to online investment self-efficacy. Furthermore, online investment self-efficacy played a significant role in fueling investor preference for the traditional (full-service) or online investing approach. More efficacious investors tended to prefer Web-based technologies as a vehicle for investing, whereas less efficacious individuals favored the traditional method.