Determinants of investment decisions among Generation Z university students in Nairobi, Kenya: the moderating effect of financial literacy

Abstract

Investment choices are central to financial security, wealth creation, and risk management, yet the determinants of such decisions among Generation Z in emerging markets remain underexplored. This study examined the determinants influencing investment decisions among Generation Z university students in Nairobi, Kenya, focusing on personal characteristics, environmental influences, and technological platforms, while evaluating the moderating effect of financial literacy. Anchored in the Theory of Planned Behavior, Modern Portfolio Theory, and Decision Theory, the study adopted a positivist research philosophy within a quantitative descriptive cross-sectional design. The target population comprised Generation Z students aged 20–27, enrolled in their 3rd and 4th years across the 13 selected universities in Nairobi. Data were collected between February 2026 and March 2026 from 496 out of a minimum expected of 384 respondents targeted, through structured questionnaires administered online via official student associations and academic networks, of which 321 valid responses were retained after data cleaning. The study operationalized the main constructs using Likert-scale items and objective financial literacy questions, and reliability was assessed using Cronbach’s alpha. The collected data were coded and analyzed using STATA version 19 through descriptive statistics, correlation analysis, and regression-based moderation models. The findings revealed that personal determinants exerted the strongest positive and statistically significant influence on investment decisions, followed by technological determinants, while environmental determinants were significant only in isolation and became non-significant in the combined model. Financial literacy had a positive direct effect on investment decisions and significantly moderated only the relationship between personal determinants and investment decisions, with a negative attenuation effect. The study recommends strengthening practical financial literacy programs in universities, improving student-oriented digital investment tools, and promoting low-entry investment products tailored to Gen z in universities. The study was limited by its cross-sectional design, reliance on self-reported data, and focus on university students in Nairobi, which may limit broader generalizability.