THE IMPACT OF US-CHINA TRADE WAR ON INVESMENT DECISION IN INDONESIA
DOI:
https://doi.org/10.35794/jmbi.v12i3.65047Abstract
The US–China trade war has created substantial uncertainty in the global economy, influencing investment patterns in emerging markets such as Indonesia. This study examines how financial literacy, risk perception, and locus of control shape Indonesian investors’ decisions when choosing between risky and safe assets during this period of economic volatility. By focusing on behavior displayed throughout the trade war, the research highlights how investors weigh potential risks against expected returns amid heightened market instability. Using a quantitative approach, the study employs multiple regression analysis to assess the extent to which these psychological and economic factors affect investment choices. The findings aim to deepen the understanding of investor behavior in times of crisis and provide practical insights for both individual and institutional investors navigating uncertain conditions. Furthermore, the results contribute to the broader field of behavioral finance by illustrating how cognitive and psychological traits influence investment strategies. Insights from this study may assist policymakers, financial advisors, and investors in developing more informed approaches to managing portfolios during periods of global economic disruption.
References
Ahmed, A. E., Ucbasaran, D., Cacciotti, G., & Williams, T. A. (2022). Integrating Psy-chological Resilience, Stress, and Coping in Entrepreneurship: A Critical Review and Research Agenda. Entrepreneurship: Theory and Practice, 46(3), 497–538. https://doi.org/10.1177/10422587211046542
Alford, S., & Teater, B. (2025). 14: Quantitative research. In Handbook of Research Methods in Social Work (pp. 156–171). Edward Elgar Publishing. https://doi.org/10.4337/9781035310173.00023
Alita, D., Putra, A. D., & Darwis, D. (2021). Analysis of classic assumption test and multiple linear regression coefficient test for employee structural office recom-mendation. IJCCS (Indonesian Journal of Computing and Cybernetics Systems), 15(3), 295–306.
Armaini, R., Rachma Sari, K., Dwitayanti, Y., Akuntansi, J., Sriwijaya, N., & Sriwija-ya, P. N. (2023). Impact of Real-Time Data, Market Sentiment, and Economic Fac-tors on Investment Profitability in Indonesia. The Es Accounting and Finance, 2(01), 53–63. https://doi.org/10.58812/esaf.v2i01
Atikah, A., & Kurniawan, R. R. (2021). Pengaruh Literasi Keuangan, Locus of Control, dan Financial Self Efficacy Terhadap Perilaku Manajemen Keuangan. JMB: Jurnal Manajemen Dan Bisnis, 10(2).
Bagus, I., Febri Mahwan, P., Trisna Herawati, N., Ekonomi, J., & Akuntansi, D. (2021). Pengaruh Literasi Keuangan, Persepsi Risiko, Dan Locus Of Control Terhadap Keputusan Investasi Pengusaha Muda Di Singaraja. In Jurnal Ilmiah Mahasiswa Akuntansi) Universitas Pendidikan Ganesha (Vol. 12, Issue 03). www.ojk.go.id
Bai, M., & Ho, L. (2023). How do gold and oil react to the COVID-19 pandemic: A re-view. Energy & Environment, 34(7), 2876–2902.
Bairagi, P., & Chakraborty, A. (2021). Effect Of Gender, Age And Income 0n Investors’ Risk Perception In Investment Decision: A Survey Study. Age And Income 0n In-vestors’ Risk Perception In Investment Decision: A Survey Study (May 11, 2021).
Bandur, Dr. D. B. A. (2021). Validitas dan Reliabilitas Penelitian.
Bown, C. P. (2025). US-China trade war tariffs: An up-to-date chart. https://www.piie.com/research/piie-charts/2019/us-china-trade-war-tariffs-date-chart
Cheklaukova, E. L. (2024). ANALYSIS OF THE PROFITABILITY OF FINANCIAL INSTRUMENTS. Modern Technologies and Scientific and Technological Progress, 2024(1), 381–382.
Chen, M. (2022). Locus of Control Risk Perception and New Venture Decisions--Based on Logistics Regression Model. 2022 2nd International Conference on Management Science and Software Engineering (ICMSSE 2022), 198–204.
Chicco, D., Warrens, M. J., & Jurman, G. (2021). The coefficient of determination R-squared is more informative than SMAPE, MAE, MAPE, MSE and RMSE in re-gression analysis evaluation. PeerJ Computer Science, 7, 1–24. https://doi.org/10.7717/PEERJ-CS.623
Deb, S., & Singh, R. (2018). Dynamics of Risk Perception Towards Mutual Fund In-vestment Decisions. Iranian Journal of Management Studies, 11(2). https://doi.org/10.22059/ijms.2018.246392.672920
Dewi, V. I., Febrian, E., Effendi, N., Anwar, M., & Nidar, S. R. (2020). Financial litera-cy and its variables: The evidence from Indonesia. Economics and Sociology, 13(3), 133–154. https://doi.org/10.14254/2071
Fadila, N., Goso, G., Hamid, R. S., & Ukkas, I. (2022a). Pengaruh Literasi Keuangan, Financial Technology, Persepsi Risiko, dan Locus of Control Terhadap Keputusan Investasi Pengusaha Muda. Owner, 6(2), 1633–1643. https://doi.org/10.33395/owner.v6i2.789
Fadila, N., Goso, G., Hamid, R. S., & Ukkas, I. (2022b). Pengaruh Literasi Keuangan, Financial Technology, Persepsi Risiko, dan Locus of Control Terhadap Keputusan Investasi Pengusaha Muda. Owner, 6(2), 1633–1643. https://doi.org/10.33395/owner.v6i2.789
Fama, E. F. (1970). Efficient capital markets. Journal of Finance, 25(2), 383–417.
Fama, E. F. (2021). Market efficiency, long-term returns, and behavioral finance. Dis-ponível No.
Goyal, K., & Kumar, S. (2021). Financial literacy: A systematic review and bibliometric analysis. In International Journal of Consumer Studies (Vol. 45, Issue 1, pp. 80–105). Blackwell Publishing Ltd. https://doi.org/10.1111/ijcs.12605
Hala, Y., Abdullah, M. W., Andayani, W., Ilyas, G. B., & Akob, M. (2020). The Finan-cial Behavior of Investment Decision Making Between Real and Financial Assets Sectors. Journal of Asian Finance, Economics and Business, 7(12), 635–645. https://doi.org/10.13106/JAFEB.2020.VOL7.NO12.635
Hendarto, K., Anastasia, N., & Basana, S. R. (2021). The Effect of Financial Literacy, Financial Risk Tolerance, and Financial Socialization Agents on Stock Investment Decision in The Millennial Generation. Petra International Journal of Business Studies, 4(1), 11–22. https://doi.org/10.9744/ijbs.4.1.11-22
Hermina, D., & Huda, N. (2024). Memahami Populasi dan Sampel: Pilar Utama dalam Penelitian Kuantitatif. In Syntax Admiration (Vol. 5, Issue 12).
HSBC. (2025). Foreign direct investment vital for unlocking Indonesia’s potential.
Iriani, N., Agustianti, A., Sucianti, R., Rahman M, A., & Putera, W. (2024). Under-standing Risk and Uncertainty Management: A Qualitative Inquiry into Develop-ing Business Strategies Amidst Global Economic Shifts, Government Policies, and Market Volatility. Golden Ratio of Finance Management, 4(2), 62–77. https://doi.org/10.52970/grfm.v4i2.444
Jannah, F. M. (2020). PENINGKATAN EKONOMI DI TENGAH PANDEMI DALAM MENUNJANG PERGERAKAN PERTUMBUHAN EKONOMI DI SURABAYA.
Karnia, R. (2024). Importance of Reliability and Validity in Research. Psychology and Behavioral Sciences, 13(6), 137–141. https://doi.org/10.11648/j.pbs.20241306.11
Kepramareni, P., Putra, I. G. C., Mirayani, L. P. M., Laksemini, K. D. I. S., & Janawati, N. W. J. (2025). The Influence of Financial Literacy and Risk Tolerance on Re-tirement Financial Planning. Global Business & Finance Review, 30(2), 86.
Kuchma, N. S. (2019). US - China trade war: reaction of stock exchanges to the trans-formation of the foreign policy agenda. RUDN Journal of Economics, 27(3), 415–428. https://doi.org/10.22363/2313-2329-2019-27-3-415-428
Lusardi, A., & Messy, F.-A. (2023). The importance of financial literacy and its impact on financial wellbeing. Journal of Financial Literacy and Wellbeing, 1(1), 1–11. https://doi.org/10.1017/flw.2023.8
Mahardhika, M. D., & Asandimitra, N. (2023). Pengaruh overconfidence, risk tolerance, return, financial literacy, financial technology terhadap keputusan investasi yang dilakukan mahasiswa Surabaya. Jurnal Ilmu Manajemen, 602–613.
Mnif, E., Salhi, B., Mouakha, K., & Jarboui, A. (2022). Investor behavior and crypto-currency market bubbles during the COVID-19 pandemic. Review of Behavioral Finance, 14(4), 491–507.
Nainggolan, R., Christiani, N., & Tungka, N. F. (2021). Levels of Financial Literacy in Terms of the Ethnicity, Gender, Religion and Locus of Control of College Stu-dents. International Journal of Economics, Business and Accounting Research (IJEBAR), 5(3), 2723–2733.
Nasution, A. A., Harahap, B., & Ritonga, Z. (2022). The Influence of Product Quality, Promotion and Design on Purchase Decisions for Yamaha Nmax Motor Vehicles SPSS Application Based. International Journal of Economics (IJEC), 1(1), 1–13.
NBER. (2022). How the US-China Trade War Affected the Rest of the World. https://www.nber.org/digest/202204/how-us-china-trade-war-affected-rest-world
Nisani, D., Qadan, M., & Shelef, A. (2022). Risk and Uncertainty at the Outbreak of the COVID-19 Pandemic. Sustainability (Switzerland), 14(14). https://doi.org/10.3390/su14148527
Nur Aini, N. S., & Lutfi, L. (2019). The influence of risk perception, risk tolerance, overconfidence, and loss aversion towards investment decision making. Journal of Economics, Business, & Accountancy Ventura, 21(3), 401–413. https://doi.org/10.14414/jebav.v21i3.1663
Nurmelia, N., Nur Fadilla, F., Wahyuni, N. A., & Margaretha Leon, F. (2021). PAST BEHAVIOUR, FINANCIAL LITERACY AND INVESTMENT DECISION-MAKING PROCESS OF INDIVIDUAL INVESTORS (Vol. 20, Issue 01).
Obeng, G. (2019). Behavioural Antecedents Complementing Classical Financial Models for Rational Decision Making. International Journal of Publication and Social Stud-ies, 4(2), 111–122. https://doi.org/10.18488/journal.135.2019.42.111.122
Purwito, D. D. (2023). Pengambilan Keputusan Memilih 'Spacer" Terbaik Pada Proses Pemintalan Pembuatan Benang Cotton Nei 28S 100% Menggunakan Analisa Statistik “T” Test dan “F” Test.
Rasyid, R., Linda, M. R., Patrisia, D., Fitra, H., & Susanti, Y. (2018). The Effect of the Locus of Control, Financial Knowledge and Income on Investment Decisions.
Romadhani, S., & Pratama, A. I. (2020). Politeknik Negeri Bengkalis Nopember 2020, hlm. In Seminar Nasional Industri dan Teknologi (SNIT).
Ruan, Y. (2024). Exploring Multiple Regression Models: Key Concepts and Applications.
Sajid, M. A. (2024). Fostering Financial Literacy in Children: A Cornerstone for Eco-nomic Well-Being. https://doi.org/10.71085/joclsi
Shu-Hui Su. (2022). THE EFFECT OF DEMOGRAPHIC CHARACTERISTICS ON RISK PERCEPTION AND INVESTMENT DECISION: AN EMPIRICAL STUDY IN VIETNAM. Indian Journal of Finance and Banking, 19–32. https://doi.org/10.46281/ijfb.v9i1.1548
Singh, A., & Shukla, M. A. (2021). THE CONCURRENCE OF EFFICIENT MARKET HYPOTHESIS AND BEHAVIOURAL FINANCE.
Sudono, A. (2023). STUDY OF FINANCIAL LITERACY MEASUREMENT INDICATORS FOR INDEPENDENT COFFEE SHOP MSMES; A LITERATURE REVIEW. JRMSI - Jurnal Riset Manajemen Sains Indonesia, 14(01), 82–87. https://doi.org/10.21009/jrmsi.014.1.09
Sulistiyowati, L. N., & Pratama, V. (2023). Indonesia’s macroeconomic conditions dur-ing United States-China trade war. Jurnal Ekonomi Dan Bisnis, 26(Oktober), 509–530.
Warjono, D. K., Ika Prajawati, M., & Sulhan, M. (2024). Risk Perception and Return Expectation on Investment Decisions in the Capital Market. Jurnal Inovasi Pen-didikan Ekonomi (JIPE), 14(2), 157. https://doi.org/10.24036/011315280
Xiao, J. J., Huang, J., Goyal, K., & Kumar, S. (2022). Financial capability: a systematic conceptual review, extension and synthesis. International Journal of Bank Market-ing, 40(7), 1680–1717. https://doi.org/10.1108/IJBM-05-2022-0185
