Abstract:
The primary objective of this study is to investigate the behavior of individual investors in the
stock market during Sri Lanka’s economic crisis. The study employs an extended version of
the Theory of Planned Behaviour (TPB) to comprehensively understand the factors
influencing individual investor decisions. Utilizing a quantitative approach, this study
examines investors’ intention to invest in the stock market during the current economic crisis
in Sri Lanka by expanding the theory of planned behavior. Based on the research problem, the
individual investor intention towards the stock market is handled as the dependent variable in
this study, while investor attitudes, subjective norms, perceived behavioral control, and
perceived risk are treated as independent variables, and perceived knowledge of economic
crisis is treated as a moderate variable in the relationship between investor attitudes and
investor intention. Primary data were collected through a self-administered questionnaire
distributed to a sample of 110 respondents from existing and potential investors in the
Colombo Stock Market. The convenience sampling method was used to collect data, and the
regression results demonstrated that amid the economic crisis, the subjective norms towards
investing had the largest impact on individuals’ intention to participate in the stock market,
and perceived behavioral control had a highly significant influence on individuals’ investor
intentions. This study examines only current and prospective individual investors in the
Colombo stock market during Sri Lanka’s economic crisis. Few studies have attempted to
include perceived risk and perceived knowledge of economic crises within the investors’
decision-making framework, and future research should focus on comparative studies among
diverse market contexts. Owing to Sri Lanka’s economic crisis, the Theory of Planned
behaviours (TPB) put in this study has contributed valuable insight for stock market
participants, policymakers, financial professionals, and regulators to make effective and
informed investment decisions, especially with reference to the crisis situation.
