From social media signals to investment intentions: a dual-path model of investor decision-making in the UAE digital environment

Although there are numerous studies relating to social media and investors’ intentions to make purchases, very few have examined the joint impacts of information and signals generated from social media on investors’ decisions in emerging markets. Additionally, previous studies have investigated the various components of social media's impacts on investors’ intentions separately. They failed to include the cognitive and perceptual mechanisms involved in the process and integrate these mechanisms within a unified framework. To fill this void, we investigate the effect of social media perceptions on investors’ intentions to buy government-backed stock. Specifically, our study will use the case of Salik, a government-backed stock in the UAE. Utilizing information adoption theory and Signaling Theory, we developed a dual path model that indicates that four social media factors (information adequacy, perceived value of information, Content Credibility and Online Community Behavior) affect purchase intention via two mediator variables (Salik's image and Investor Beliefs). We used a quantitative explanatory research design and collected data from 392 UAE citizens and residents through convenience sampling. We used covariance-based structural equation modeling (CB-sem) to test our model and applied boot strapping for mediation analysis and non-parametric tests for group differences. Our results show that Online Community Behavior is the strongest predictor among all the predictors, producing strong positive direct and indirect effects on Salik's image and Investor Beliefs and subsequently purchase intention. On the other hand, Information Adequacy and Perceived Value of Information produced no statistically significant effects within our structural model. However, Content Credibility had a statistically significant negative relationship with Investor Beliefs, indicating a risk awareness due to lack of credibility. Furthermore, both Salik's image and Investor Beliefs were good predictors of purchase intention, but Investor Beliefs were a better predictor. Finally, boot strapping analysis showed that the primary pathway through which Online Community Behavior affects purchase intent is through Investor Beliefs. This study expands upon the existing knowledge base by combining cognitive and signaling perspectives into one model and by applying them to a government-backed stock in an emerging market. Thus, this study provides new insights into the ways in which social media influences investor decision-making and highlights the central role of online communities in shaping investment behavior. As such, this study provides guidance for organizations developing digital communication strategies for their stakeholders, in addition to serving as a resource for regulators designing appropriate regulations for financial markets.