i

THE EFFECTS OF BRAND EQUITY ON CAPITAL MARKET

INVESTMENT INTENTION: THE MEDIATING ROLE OF

PERCEIVED RISK

UNDERGRADUATE THESIS

Submitted in Partial Fulfillment of the Requirement

for The Degree of Bachelor of Economics

Yovita Mandasari

20160410272

INTERNATIONAL PROGRAM OF MANAGEMENT AND BUSINESS

FACULTY OF ECONOMIC AND BUSINESS

UNIVERSITAS MUHAMMADIYAH YOGYAKARTA

2020

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DECLARATION PAGE

I hereby,

Name : Yovita Mandasari

Student Number : 20160410272

Stating that this paper with the title: "THE EFFECTS OF BRAND EQUITY ON

CAPITAL MARKET INVESTMENT INTENTION: THE MEDIATING ROLE OF

PECEIVED RISK" no work has ever been submitted to obtain a degree in a

university, and as long as my knowledge or opinions is not available that have been

written or published by other people, except those written in reference to this text and

mentioned in the References. If it turns out that in this thesis it is known that there are

works or opinions that have been written or published by other people, then I am

willing to cancel the work.

Yogyakarta, July 10th

, 2020

Yovita Mandasari

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MOTTO

QS Al-Insyirah 94:5-6

“Verily with every hardship comes ease”

“An investment in knowledge pays the best interest”

― Benjamin Franklin

“When the dark night passes, a bright morning will come”

― BTS

“Even when I fall and hurt myself, I keep running toward my dream”

― BTS

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DEDICATION

الرحيم الرحمن الل بسم

Thank you, I pray to Allah SWT for all the endless graces so I am able to

complete this undergraduate thesis well and smoothly. I believe that everything is

based on our hard work. Allah found me lost and guided me.

* My Beloved Parents, Brother, and Sister *

Thank you, my father, my mother, my brother, and my sister for the endless

support. Without you I won’t be able to finish this undergraduate thesis. I present this

thesis for my family as my gratitude for your hard work and sacrifice.

* My Friends *

Thank you for all the endless support from all my friends. Your suggestion,

criticism, makes this thesis possible. I hope we all find what we dreamed of and let’s

achieve success in our own way.

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ABSTRACT

The phenomenon of competition among companies is getting tighter in this

era. It makes companies to do more in order to get higher value in the mind of

customers. One of value of company that becomes important is brand. Brand is

intangible assets that lead customers trust and involves person's willingness to

behave. A company’s reputation also supported by how strong its brand equity.

Nowadays, marketing is getting dynamic to be used in any areas, including capital

market industry. The improvement of capital market investment within the last three

years makes company conducting marketing things to promote their companies in

order to get potential investors who interested to invest in their company by exposing

brand information. This study investigates the influence of brand equity on

investment intention. It explores the mediating effect of perceived risk towards brand

equity and investment intention. It tests the differential respond between brand

popularity (famous and non-famous brand), risk information (low and high risk) on

willingness to invest. Experimental research is conducted in this study to test the

difference respond before and after treatment. The number of participant in this study

is 121 participants. The findings of this study are famous brand has good brand

equity and company that has famous brand type in low risk has positive respond to

intention to invest. This study discusses about consumer good industry company that

listed in Indonesia Stock Exchange (IDX), PT Unilever Indonesia Tbk. It concerns in

how companies that have strong brand equity can attract and encourage people to

invest in their stocks.

Keywords: brand equity, perceived risk, investment intention, experimental method

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PREFACE

Praise and deep gratitude to Allah SWT for the abundance of grace, and

guidance of Him given to the writer that made this thesis can be completed properly.

Greetings and salawat may always be devoted to the Prophet Muhammad SAW.

The undergraduate thesis entitled “The Effects of Brand Equity on Capital

Market Investment Intention: The Mediating Role of Perceived Risk” is structured to

meet the requirements of the undergraduate curriculum stratum-1 (S-1) in the

Department of International Management and Business Studies, Faculty of

Economics and Business, Universitas Muhammadiyah Yogyakarta.

The author would like to say thank you profusely for all the help that has been

given, either directly or indirectly during the preparation of this final thesis to

complete. Gratitude’s that are due to:

1. Mr. Rizal Yaya, S.E., M. Sc., Ph.D., Ak., CA. as the dean of faculty economic

and business Universitas Muhammadiyah Yogyakarta

2. Mrs. Retno Widowati PA., SE., M.Si., Ph.D. as the head department of

Management.

3. Mrs. Dr. Indah Fatmawati, S.E., M.Si as supervisor who always gives free time,

input, advice, support, and guidance during the completion of this thesis.

4. Papi Komarudin and Mami Eni Nurbandari as the parents of the author and

Delvino Kevin Ernestio Teiji and Shareen Chiquita Janice Vanesa as my borther

and sister who always prays and gives enthusiasm, support and attention so that

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the writer can complete the study. There is no me without you. You’re the best of

me

5. Kakung and Uti, as inspirational grandparents in my life, made me choose to

study business management and become an entrepreneur. Thank you for all your

love, affection, and inspiration.

6. Bagus Aji Ilman Sesar Hariyanto, S.IP, a sweetheart who always provides moral

and material support, listens to my complaints and happy stories, and helps me in

many ways. Thank you for teaching me many things and accompanying me

when it is difficult or happy. I pray a lot for our dreams together in the future

7. Padang Lampung Jaya Group: Agung, Aufandi, Taufik, Fasa, Faiqah, Arif,

Dhimas, Imad, Nizar, Oni, and Yunita that always support and help the author in

the process of completing this undergraduate thesis.

8. Kim Namjoon (RM), Kim Seokjin (Jin), Min Yoongi (SUGA), Jung Hoseok (J-

Hope), Park Jimin (Jimin), Kim Taehyung (V), Jeon Jungkook (Jungkook), BTS

members as a source of inspiration for author. Thank you for creating great

songs, your songs always accompany my days even when writing a thesis. You

are my inspiration to never give up. Finally, I show you the best of me. I

PURPLE YOU.

9. All parties who cannot be mentioned one by one by the author that has involved

a lot of help so that this thesis could be completed.

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TABLE OF CONTENTS

VALIDATION PAGE .............................................................................................................. ii

DECLARATION PAGE ...........................................................................................................iv

MOTTO ..................................................................................................................................... v

DEDICATION ..........................................................................................................................vi

ABSTRACT ............................................................................................................................ vii

PREFACE .............................................................................................................................. viii

TABLE OF CONTENTS ........................................................................................................... x

LIST OF FIGURES ................................................................................................................. 14

CHAPTER I INTRODUCTION .............................................. Error! Bookmark not defined.

A. Research Background .................................................. Error! Bookmark not defined.

B. Research Question ....................................................... Error! Bookmark not defined.

C. Research Objective ...................................................... Error! Bookmark not defined.

D. Research Contribution.................................................. Error! Bookmark not defined.

CHAPTER II THEORETICAL FRAMEWORK .................... Error! Bookmark not defined.

A. Theoretical Framework ................................................ Error! Bookmark not defined.

B. Relationship among Variables ..................................... Error! Bookmark not defined.

C. Research Model ........................................................... Error! Bookmark not defined.

CHAPTER III RESEARCH METHOD .................................. Error! Bookmark not defined.

A. Research Design ........................................................... Error! Bookmark not defined.

B. Sampling Method ......................................................... Error! Bookmark not defined.

C. Participant .................................................................... Error! Bookmark not defined.

D. Experimental Design .................................................... Error! Bookmark not defined.

E. Operational Definition ................................................. Error! Bookmark not defined.

F. Stimuli Design ............................................................. Error! Bookmark not defined.

G. Manipulation Check ..................................................... Error! Bookmark not defined.

H. Randomization ............................................................. Error! Bookmark not defined.

I. Experimental Procedure ............................................... Error! Bookmark not defined.

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J. Instrument Quality Test ............................................... Error! Bookmark not defined.

K. Data Analysis ............................................................... Error! Bookmark not defined.

CHAPTER IV .......................................................................... Error! Bookmark not defined.

DATA ANALYSIS .................................................................. Error! Bookmark not defined.

A. Implementation of Experiment .................................... Error! Bookmark not defined.

Table 4.1. The Number of Participant for Experiment Class ... Error! Bookmark not defined.

B. Manipulation Check ..................................................... Error! Bookmark not defined.

C. Measurement ................................................................ Error! Bookmark not defined.

Table 4.5. Variable Distribution Items ..................................... Error! Bookmark not defined.

D. Data Analysis ............................................................... Error! Bookmark not defined.

1. Descriptive Analysis of Research Object ................. Error! Bookmark not defined.

2. Validity and Reliability Test .................................... Error! Bookmark not defined.

a. Validity Test ............................................................. Error! Bookmark not defined.

b. Reliability Test ......................................................... Error! Bookmark not defined.

3. Normality Test Assumption ..................................... Error! Bookmark not defined.

4. Investment Intention Before and After Treatment ... Error! Bookmark not defined.

5. Hypothesis Test Result............................................. Error! Bookmark not defined.

a. Hypothesis 1 ............................................................. Error! Bookmark not defined.

b. Hypothesis 2 ............................................................. Error! Bookmark not defined.

c. Hypothesis 3 and 4 ................................................... Error! Bookmark not defined.

d. Hypothesis 5 ............................................................. Error! Bookmark not defined.

E. Discussion .................................................................... Error! Bookmark not defined.

1. Discussion of Brand Popularity on Brand Equity VariableError! Bookmark not defined.

2. Discussion of Risk Information on Brand Popularity and Brand Equity VariableError! Bookmark not defined.

3. Discussion of Brand Popularity on Investment IntentionError! Bookmark not defined.

4. Discussion of Risk Information on Investment IntentionError! Bookmark not defined.

5. Discussion of Mediating Effect of Perceived Risk to the Relationship between of

Brand Equity and Investment Intention ........................... Error! Bookmark not defined.

BAB V ..................................................................................... Error! Bookmark not defined.

CONCLUSIONS, LIMITATIONS, AND RECOMMENDATION FOR FUTURE

RESEARCH ............................................................................. Error! Bookmark not defined.

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A. Conclusion ................................................................... Error! Bookmark not defined.

B. Recommendation ......................................................... Error! Bookmark not defined.

C. The Research Limitation .............................................. Error! Bookmark not defined.

LIST OF REFERENCES ......................................................... Error! Bookmark not defined.

QUESTIONNAIRE ATTACHMENT ..................................... Error! Bookmark not defined.

APPENDIX I : DESCRIPTIVE ANALYSIS .......................... Error! Bookmark not defined.

APPENDIX II : MANIPULATION CHECK ......................... Error! Bookmark not defined.

APPENDIX III : NORMALITY TEST .................................. Error! Bookmark not defined.

APPENDIX IV: VALIDITY AND RELIABILITY TEST .... Error! Bookmark not defined.

APPENDIX V : PRE-TEST AND POST-TEST TEST ......... Error! Bookmark not defined.

APPENDIX VI : ANOVA OF BRAND EQUITY .................. Error! Bookmark not defined.

APPENDIX VIII : ANOVA OF INVESTMENT INTENTIONError! Bookmark not defined.

APPENDIX IX : PATH ANALYSIS ....................................... Error! Bookmark not defined.

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LIST OF TABLES

Table 3.1 Design for the experiment ....................................... Error! Bookmark not defined.

Table 3.2 Variable Measurement ........................................... Error! Bookmark not defined.

Table 3.3 Contents of the Experimental Stimuli Booklet Plan ........... Error! Bookmark not

defined.

Table 3.4 Experiment Procedure ............................................ Error! Bookmark not defined.

Table 4.1 The Number of Participant for Experiment Class Error! Bookmark not defined.

Table 4.2 The Number of Participants in Each Type of Treatment ... Error! Bookmark not

defined.

Table 4.3 The Number of Participants for Experiment Class............. Error! Bookmark not

defined.

Table 4.4 Manipulation Check of Brand Popularity and Investment Risk ............... Error!

Bookmark not defined.

Table 4.5 Variable Distribution Items.................................... Error! Bookmark not defined.

Table 4.6 Descriptive Analysis ................................................ Error! Bookmark not defined.

Table 4.7 KMO-MSA and Bartlett's Test Result .................. Error! Bookmark not defined.

Table 4.8 Chi-Square Test Result ........................................... Error! Bookmark not defined.

Table 4.9 Anti-Image Correlation Matrix (IMC) Test Result ............ Error! Bookmark not

defined.

Table 4.10 Reliability Test Result ........................................... Error! Bookmark not defined.

Table 4.11 Normality Test Results.......................................... Error! Bookmark not defined.

Table 4.12 Investment Intention Before and After Exposure to Treatment .............. Error!

Bookmark not defined.

Table 4.13 Descriptive Table of Brand Equity Statistics ...... Error! Bookmark not defined.

Table 4.14 Influences between Dependent Variable of Brand Equity Error! Bookmark not

defined.

Table 4.15 Moderated Regression Analysis ........................... Error! Bookmark not defined.

Table 4.16 Investment Intention Descriptive Statistics Table ............. Error! Bookmark not

defined.

Table 4.17 The Effect Variable Dependent Investment Intention ...... Error! Bookmark not

defined.

Table 4.18 Path Analysis ......................................................... Error! Bookmark not defined.

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LIST OF FIGURES

Figure 2. 1 Research Model .................................................... Error! Bookmark not defined.

Figure 4. 1 Estimated Curve Marginal Means Brand Equity ............ Error! Bookmark not

defined.

Figure 4. 2 Estimated Curve Marginal Means Investment Intention Error! Bookmark not

defined.