ASSESSING THE INFLUENCE OF DECISION-MAKING FACTORS ON INVESTMENT PORTFOLIO BEHAVIOUR OF NON-RESIDENT INDIANS: AN EMPIRICAL STUDY

Abstract

This study investigates the impact of decision-making factors on the investment portfolios of Non-Resident Indians (NRIs) from Kerala, a region with one of the highest remittance inflows in India. Drawing from existing literature, ten independent variables—such as risk tolerance, return expectations, financial literacy, and behavioural biases—were identified and assessed using a structured questionnaire. A sample of 385 NRI respondents was selected based on Cochran’s formula, and data were analysed using Structural Equation Modelling (SEM) in AMOS. The results reveal that most constructs significantly influence portfolio decisions, except for liquidity preference and information sources, which did not show a strong effect. The study contributes to a better understanding of NRI investment behaviour by integrating financial and psychological variables in a single model. It offers valuable insights for financial planners, policy-makers, and investment advisors working with the diaspora population. The findings also highlight the need for targeted financial education and customised investment products to enhance portfolio diversification. Limitations include reliance on self-reported data and a geographically specific sample. Future research can expand on these findings by exploring other NRI communities and employing longitudinal or mixed-method approaches to better capture changes in behaviour over time.