KEY FACTORS INFLUENCING SAVING AND INVESTMENT DECISIONS: A COMPREHENSIVE LITERATURE REVIEW

Abstract

In recent decades, there has been a profound shift in the fundamental structure of the Indian financial market, transitioning from a focus on saving to one centered on investment. These transformations have broadened the scope of participants' engagement and have influenced their risk-taking behavior. This study aims to address this shift by examining existing research on the factors influencing saving and investment behavior among Indian individuals. Utilizing the Web of Science database, we conducted a systematic review following the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) framework. Out of 3262 identified studies, 32 were included in our analysis. Our review reveals various economic and non-economic determinants shaping saving and investment behavior. Key findings underscore the pivotal role of individual decision-making, future financial security considerations (such as pension plans), and motivations for saving. Additionally, factors like portfolio selection and individual investment strategies emerged as significant influencers. However, it's important to note that our study is limited to a qualitative synthesis within the PRISMA framework. Future endeavors could employ more sophisticated meta-analysis techniques for a more comprehensive assessment of quantitative studies. To date, there has been a dearth of comprehensive reviews exploring the contextual nuances, determinants, and methodological approaches in this domain, making our review a unique and insightful contribution to the field.