The Influence of Fear of Missing Out (FOMO) and Herding Behavior on Stock Investment Decisions among University Students in Samarinda City

Abstract

Purpose: This study aims to analyze the influence of Fear of Missing Out (FOMO) and Herding Behavior on stock investment decisions among Generation Z university students in Samarinda.

Design/methodology/approach: This study employs a causal quantitative approach using an online survey. Data were collected from 419 valid respondents across various universities in Samarinda through purposive sampling. The research instrument utilized a 5-point Likert scale, and the data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) with SmartPLS. A pilot test using IBM SPSS Statistics 25 was conducted to ensure instrument validity and reliability.

Findings:  The results reveal that both FOMO and Herding Behavior have significant positive effects on stock investment decisions. FOMO demonstrated a path coefficient of 0.428, p-value 0.000, while herding behavior showed a path coefficient of 0.205, p-value 0.007. These findings confirm Behavioral Finance Theory, highlighting that emotional factors and social pressures can override pure rationality in novice investors, particularly among Generation Z students who are highly exposed to digital environments and social media.

Practical implications: Students are urged to strengthen their financial literacy and emotional regulation to avoid impulsive investment decisions driven by FOMO and social pressure. Universities and capital market institutions are encouraged to enhance financial education programs to foster more rational investment behavior among young investors.

Originality/value: This study contributes new empirical evidence on the psychological drivers of investment decisions, specifically focusing on Generation Z student investors in an underexplored secondary city (Samarinda) within Indonesia’s rapidly growing capital market. It provides fresh insight into how FOMO and herding behavior operate in this specific demographic, which remains largely underrepresented in behavioral finance literature.

Paper type: empirical