Factor Affecting People Investing in Mutual Fund

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Factors affecting people investing in Mutual Fund
in Malaysia: An application of the
Theory of Planned Behavior

Kuah Kean Lam

Research report in partial fulfillment of the requirements for the degree of MBA
2008

ACKNOWLEDGEMENTS

I would like to thank my supervisor, Dr. Nabsiah Abd. Wahid and my co-supervisor, Dr. Datin Joriah for their invaluable guidance in helping me with this research. Special thanks also go to Associate Professor T. Ramayah for his kind assistance and consultants in my statistical analysis. My sincere thanks to all the lecturers in the MBA programs.

I also want to thank my family for their patience, support and encouragement during the period of my study. I am also grateful to my friends for their help and encouragement. Lastly, I wish to accord my appreciation to all the respondents who had so kind to respond my questionnaire in time.

i

TABLE OF CONTENTS

Page
ACKNOWLEDGEMENT

i

TABLE OF CONTENTS

ii

LIST OF TABLES

vii

LIST OF FIGURES

viii

LIST OF APPENDICES

ix

ABSTRAK

xi

ABSTRACT

xii

Chapter 1

INTRODUCTION

1

1.1

Introduction

1

1.2

Background

1

1.2.1

Benefits of Unit Trust Scheme

2

1.2.2

Disadvantages of Unit Trust Scheme

3

1.2.3

Types of Unit Trust Funds

4

1.2.4

Growth of Mutual Fund in Malaysia

6

1.3

Problem Statement

8

1.4

Research Objectives

10

1.5

Research Question

10

1.6

Definition of Key Terms

11

ii

1.6.1

Mutual Fund / Unit Trust Fund

1.6.2

11

Federation of Malaysia Unit Trust
Managers (FMUTM)

12

1.6.3

Net Asset Value (NAV)

12

1.6.4

Islamic Mutual Fund

12

1.6.5

Attitude

13

1.6.6

Subjective Norms

13

1.6.7

Perceived Behavioral Control

14

1.6.8

Behavioral Intention

14

1.7

14

1.8

Chapter 2

Significance of Study
Organization of Remaining Chapter

15

LITERATURE REVIEW

16

2.1

Introduction

16

2.2

Literature Review

16

2.2.1

Emerging Market Research

17

2.2.2

International Research

20

2.3

Model Explanation (TRA, TAM, TPB, and DTPB)

22

2.3.1

Theory of Reasoned Action (TRA)

23

2.3.2

Technology Acceptance Model (TAM)

25

2.3.3

Theory of Planned Behavior (TPB)

26

2.3.4

Decomposed Theory of Planned Behavior (DTPB) 28

2.3.5

Inclusion of other variables in the TPB

iii

31

2.4

33

2.5

Theoretical Framework

33

2.6

Chapter 3

Gaps in Literature

Hypothesis Development

35

METHODOLOGY

41

3.1

Introduction

41

3.2

Research Design

41

3.2.1

Type of Study

41

3.2.2

Data Collection Method

42

3.2.3

Population and Sample

42

3.2.4

Data Collection

43

3.3

Data Analysis

43

3.3.1

Descriptive Analysis

45

3.3.2

Factor Analysis

45

3.3.3

Reliability Test

45

3.3.4

Correlation Analysis

46

3.3.5

Multiple Regression Analysis

46

3.4

48
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