Journal of Economic, Finance Research and Review (JEFRR)

A Signal–Trust–Intention Framework for Retail Investor Behavior in Malaysia’s Equity Crowdfunding Market

King, Loo Sung, Piaralal, Shishi Kumar, Zulkefli, Nur Amalina, Yamaludin, Siti Mazlita, Raghavan, Santhi

18 May 2026 · Vol. 2, Issue 5, pp. 278-285

DOI: 10.65150/EP-jefrr/V2E5/2026-02

Abstract

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.

Keywords: Equity crowdfunding, Participation Paradox, Signaling Theory, Trust, Financial Literacy, Investment Intention

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King, Loo Sung, Piaralal, Shishi Kumar, Zulkefli, Nur Amalina, Yamaludin, Siti Mazlita, Raghavan, & Santhi (2026). A Signal–Trust–Intention Framework for Retail Investor Behavior in Malaysia’s Equity Crowdfunding Market. Journal of Economic, Finance Research and Review, 2(5), 278-285. https://doi.org/10.65150/EP-jefrr/V2E5/2026-02

@article{King2026,
  title   = {A Signal–Trust–Intention Framework for Retail Investor Behavior in Malaysia’s Equity Crowdfunding Market},
  author  = {King and Loo Sung and Piaralal and Shishi Kumar and Zulkefli and Nur Amalina and Yamaludin and Siti Mazlita and Raghavan and Santhi},
  journal = {Journal of Economic, Finance Research and Review},
  year    = {2026},
  volume  = {2},
  number  = {5},
  pages   = {278-285},
  doi     = {10.65150/EP-jefrr/V2E5/2026-02},
  url     = {https://doi.org/10.65150/EP-jefrr/V2E5/2026-02}
}

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