Author(s) :

William Carr.

Volume/Issue :

Abstract :

As United States citizens have continued to increase their foreign investment activities in recent years, it is increasingly important to understand the primary determinants impacting investment decisions. Existing research suggests that investment flows are heavily impacted by country relations, perceived geopolitical risk, and reciprocity; however, limited studies have investigated how these factors influence adolescent investors. This study examined the extent to which geopolitical alignment, quantified by United Nations (UN) voting similarity, influenced hypothetical foreign stock investments of Massachusetts high school students. A mixed-methods vignette design was employed, where participants were placed in a hypothetical situation to allocate $10,000 to ten different companies, varying in UN voting similarity, growth rates, and sector characteristics. Quantitative data were analyzed using Pearson’s Product- Moment Correlation and the Herfindahl-Hirschman Index, while qualitative responses were also taken into consideration. Results did not support a significant correlation between UN voting similarity and investment decisions (r ≈.1, p >.05); however, the data did support a positive relationship between company growth rates and investment allocations (r ≈.5, p <.05). Qualitative responses substantiated the overall finding that participants prioritized financial returns rather than geopolitical alignment in their decisionmaking process. Additional results revealed differences in investment preferences across demographic groups and widespread sector biases. Research proposes that adolescents may not be as concerned with geopolitical relationships when choosing investments, opting instead to base their decisions on company performance, supporting the idea that U.S. retail investors will increase investment flows to emerging economies and BRICS nations in future years.