A Signal–Trust–Intention Framework for Retail Investor Behavior in Malaysia’s Equity Crowdfunding Market
DOI:
https://doi.org/10.65150/EP-jefrr/V2E5/2026-02Keywords:
Equity crowdfunding, Participation Paradox, Signaling Theory, Trust, Financial Literacy, Investment IntentionAbstract
Equity crowdfunding (ECF) has emerged as a key fintech mechanism for entrepreneurial financing, yet increasing institutional strengthening has not consistently translated into sustained retail investor participation. This study develops a conceptual Signal–Trust–Intention framework to explain this inconsistency through the Participation Paradox, defined as the breakdown between institutional credibility and behavioral investment conversion. Integrating Signaling Theory, Trust Theory, and the Elaboration Likelihood Model, the framework explains how perceived platform quality, regulatory compliance visibility, and disclosure informativeness jointly shape retail investor trust, which subsequently influences investment intention under the moderating role of financial literacy. The study advances a behavioral transmission perspective in which institutional signals are not directly converted into action but are cognitively processed and filtered through trust formation and investor capability. By situating the analysis within a regulated equity crowdfunding environment, the framework highlights the limitations of institutional signals in generating behavioral uptake when cognitive processing and interpretive capacity vary across investors. The study contributes to fintech investment literature by offering an integrated explanation of investor behavior under uncertainty and proposing a structured agenda for future empirical validation.
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Copyright (c) 2026 Loo Sung King, Shishi Kumar Piaralal, Nur Amalina Zulkefli, Siti Mazlita Yamaludin, Santhi Raghavan (Author)
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