AUTHOR=Darwish Fairouz Sa'eed Mohammed 

TITLE=Financial literacy and investment decision: an empirical study from the Palestine Stock Exchange

JOURNAL=Frontiers in Behavioral Economics

VOLUME=Volume 4 - 2025

YEAR=2025

URL=https://www.frontiersin.org/journals/behavioral-economics/articles/10.3389/frbhe.2025.1444022

DOI=10.3389/frbhe.2025.1444022

ISSN=2813-5296

ABSTRACT=IntroductionThis study investigates the relationship between financial literacy and investment decisions among Palestinian individuals participating in the stock market. It also examines the moderating role of overconfidence in this relationship.MethodsA quantitative approach was employed using a modified version of the OECD financial literacy questionnaire, adapted for the Palestinian context. The instrument included six sections: demographic information, factors influencing investment decisions, financial literacy, knowledge, and behavior. A total of 146 investors were surveyed.ResultsThe findings reveal that Palestinian investors possess a basic level of financial literacy, which positively influences their investment decisions. Demographic variables showed no significant effect on financial literacy. However, overconfidence was found to strengthen the relationship between financial literacy and investment decision-making.DiscussionThe study provides new insights into how financial knowledge and behavioral biases, such as overconfidence, jointly shape investment behavior. These findings highlight the importance of financial education initiatives and behavioral training in enhancing investor decision-making in emerging markets like Palestine.