Is household registration system responsible for the limited participation of stock market in China?

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Yulin Liu ◽  
Min Zhang
Keyword(s):  
Stock Market ◽  
Urban Areas ◽  
Market Participation ◽  
Limited Participation ◽  
Household Registration ◽  
Registration System ◽  
Content Type ◽  
Stock Market Participation ◽  
Household Registration System ◽  
The Impact

PurposeThis paper aims to examine the effect of China’s unique household registration system (hukou) on stock market participation.Design/methodology/approachIn an effort to estimate the effect of hukou on households' financial behavior, we draw on data from China Family Panel Studies (CFPS) and use probit model and tobit model to test the effect of hukou on households stock market participation.FindingsThe results are with strong interpretative power over the limited participation of stock market in China-investors living in urban areas with urban hukou are more likely to participate in stock markets and allocate a larger fraction of financial assets to stocks and remarkably robust to a battery of robustness checks. The dual structure of social security caused by the household registration system could explain this result. Furthermore, marriage plays such a role of integrating social resources attached to hukou that only the marriage of individuals with urban hukou could significantly promote households' participation in the stock market. For married families, a household in which both husband and wife have urban hukou has a greater possibility to invest in stocks relative to those with rural hukou.Originality/valueThis paper contributes to the literature in two ways. First, much literature focuses on the stock market limited participation puzzle and gives explanations from the perspectives of individual heterogeneity and financial markets. This paper examines the effect of hukou. Such an idea is instructive to some developing countries where residents are treated differently because of the institutional reason. Second, the effects we find are economically meaningful. Our estimates indicate that medical insurance attached to hukou can explain almost 58% of the impact of hukou, which suggests that the key to reforming China's current household registration system is to make welfare separate from hukou. Moreover, homogamy based on hukou widens the gap of households' risky assets, which provides a new view to understand the income gap in the cities of China and the heterogeneous effect of marriage on stock market participation.

scholarly journals The Impact of Medical Insurance on Household Stock Market Participation: Evidence From China Household Finance Survey

2021 ◽  
Vol 9 ◽  
Author(s):  
Gui Fen Shi ◽  
Mei Li ◽  
Tao-Tao Shen ◽  
Yue Ma
Keyword(s):  
Stock Market ◽  
Urban Areas ◽  
Household Finance ◽  
Medical Insurance ◽  
Estimation Methods ◽  
Eastern Region ◽  
Mechanism Analysis ◽  
Market Participation ◽  
Stock Market Participation ◽  
The Impact

This paper explores the impact of medical insurance on the possibility of household participation in the stock market and the portfolio share of equity, applying Probit, and Tobit models with the data from China Household Finance Survey (CHFS). The empirical results highlight that participating in medical insurance can significantly increase the possibility of households participating in the stock market and the portfolio share of equity, and have passed the robustness tests, including propensity score matching (PSM), altering estimation methods, replacing explained variables, and eliminating samples. Besides, heterogeneity analysis shows that the impact of medical insurance on household stock market participation is more significant in eastern region, urban areas, and households with higher income level. Further mechanism analysis implies that household participation in medical insurance mainly affects their stock market participation through preventive savings effect. It is necessary to improve the medical insurance system and encourage household participation in stock market so as to further promote financial development in China.

scholarly journals Social Interaction and Stock Market Participation: Evidence from China

2014 ◽  
Vol 2014 ◽  
pp. 1-9 ◽  
Author(s):  
Zhifeng Liu ◽  
Tingting Zhang ◽  
Xiaoguang Yang
Keyword(s):  
Social Interaction ◽  
Linear Regression ◽  
Stock Market ◽  
Interaction Effects ◽  
Positive Influence ◽  
Education Level ◽  
Market Participation ◽  
Similar Extent ◽  
Stock Market Participation ◽  
The Impact

Current research on the impact of social interaction on the stock market participation only involves the traditional way of social interaction, and this paper further investigates the modern social interaction effects on the stock market participation and its activeness. The sample containing 150 Chinese counties is selected, and we apply grouping analysis and linear regression to conclude that social interaction has positive influence on the stock market participation and its activeness. Both traditional and modern social interaction ways affect the stock market participation and its activeness to the similar extent, so modern social interaction is of the same importance. Controlling for the respondents’ age, wealth, and education level, the above conclusion still holds.

scholarly journals Financial Sophistication, Personality and Stock Market Participation: Theory and Evidence

2018 ◽  
Vol 7 (1) ◽  
pp. 61-84
Author(s):  
Muhammad Akhtar ◽  
Faqir Muhammad ◽  
Muhammad Ayub Siddiqui
Keyword(s):  
Stock Market ◽  
Financial Literacy ◽  
Negative Impact ◽  
Future Research ◽  
Market Participation ◽  
Market Participants ◽  
Stock Market Participation ◽  
And Gender ◽  
Viable Approach ◽  
The Impact

In this empirical study, the authors examined the extent to which financial sophistication and personality effects stock market participation. Using archival research methodology, our hypothesis has been tested on a random sample of 451 stock market participants. Moderation has been tested through Andrew Hayes process. Extroversion and openness to experience positively impact stock market participation, while consciousness, agreeableness, and neuroticism have a negative impact. Financial literacy, trading experience and gender are the likely paths by which personality impacts stock market participation. Financial literacy can modify the relationship between some basic personality traits and stock market participation. It shows that behavior finance is not completely predetermined by one’s DNA and also identifies which traits are less influenced by financial literacy. Perhaps this implies that these traits are more predetermined by one’s innate characteristics. This study provides an interdisciplinary contribution by extending Big Five taxonomy as a viable approach for stock market participation. Future research may investigate the impact of family resources, investment exposure, and parent’s financial literacy, which were beyond the scope of the current study. The theoretical and practical implications of the study with respect to stock market participation are discussed.

Attitudinal factors, financial literacy, and stock market participation

2017 ◽  
Vol 35 (5) ◽  
pp. 818-841 ◽  
Author(s):  
Sreeram Sivaramakrishnan ◽  
Mala Srivastava ◽  
Anupam Rastogi
Keyword(s):  
Stock Market ◽  
Financial Literacy ◽  
Negative Impact ◽  
Emerging Market ◽  
Well Being ◽  
Policy Implications ◽  
Market Participation ◽  
Content Type ◽  
Stock Market Participation ◽  
Investor Behaviour

Purpose The purpose of this paper is to study the influence of factors such as financial literacy on a consumer’s investment decisions, particularly in the stock market. Based on two empirical studies, the theory of planned behaviour (TPB) was used to understand stock market participation (SMP) in India while developing a model to represent the relationships between the various factors. Consumer financial literacy was conceptualised to be a part of perceived behavioural control and included in the TPB. Design/methodology/approach A mixed methods research was followed where qualitative research preceded a quantitative survey-based study. In-depth interviews were conducted with investors and experts, results of which, when combined with the literature review, revealed seven variables including financial literacy which were pooled into three distinct groups based on the TPB. Responses obtained from 506 retail investors from four cities in India were analysed. Structural equation modelling was used to test the models and arrive at a final empirical model. Findings Results of the study indicated that investment intention predicts actual investments in the stock market (which represented behaviour). Financial literacy – both subjective and objective – were also found to be significant influencers on intention while only objective financial literacy seemed to affect behaviour. Three variables – perception of regulator, risk avoidance, and hassle factor – were combined to form a second-order construct which was named “Attitude to Investment Behaviour”. This had a negative impact on intention to invest in the equity markets. Financial well-being seemed to have a negative impact on intention while having a positive relationship with behaviour. Practical implications The results present significant investor behaviour and policy implications for financial services marketing. Some interventions, especially in the area of consumer financial literacy, are more likely than others to help consumers bridge the gap between non-participation and participation in the stock market. Originality/value The study makes a contribution to investor behaviour theory in the form of a comprehensive model to explain SMP in an emerging market. This can be further tested across geographies.

scholarly journals Household Registration System, Migration, and Inequity in Healthcare Access

Healthcare ◽  
2019 ◽  
Vol 7 (2) ◽  
pp. 61 ◽  
Author(s):  
Bocong Yuan ◽  
Jiannan Li ◽  
Zhaoguo Wang ◽  
Lily Wu
Keyword(s):  
Urban Areas ◽  
Large Scale ◽  
Healthcare Access ◽  
Urban Migration ◽  
Household Registration ◽  
Registration System ◽  
Household Registration System ◽  
Using Data ◽  
History Survey ◽  
System Migration

This study investigates the influence of the household registration system on rural–urban disparity in healthcare access (including healthcare quality, blood pressure check, blood test, vision test, dental examination, and breast exam), using data from a large-scale nationwide life history survey that covered 150 counties across 28 provinces and municipalities in China. In contrast to the findings of many previous studies that emphasize the disparity in the residence place as the cause of rural–urban disparity in healthcare access, this study finds that the residence place just has a very limited influence on healthcare access in China, and what really matters is the household registration type. Our empirical results show that people with a non-rural household registration type generally have better healthcare access than those with a rural one. For rural residents, changing the registration type of their household (from rural to non-rural) can improve their healthcare access, whereas changing the residence place or migrating from rural to urban areas have no effect. Therefore, mere rural-to-urban migration may not be a valid measure to eliminate the rural–urban disparity in healthcare access, unless the institution of healthcare resource allocation is reformed.

Lottery preference and stock market participation: evidence from China

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Tingting Zhang ◽  
Desheng Wei ◽  
Zhifeng Liu ◽  
Xihao Wu
Keyword(s):  
Stock Market ◽  
Macro Level ◽  
Trading Behavior ◽  
Market Participation ◽  
Time Series Regression ◽  
Content Type ◽  
Search Volume ◽  
Stock Market Participation ◽  
Stock Traders ◽  
Validation Tests

PurposeThis paper studies the effects of lottery preference on stock market participation at the macro level.Design/methodology/approachThe authors use the abnormal search volume intensity for lottery-related keywords from the Baidu search engine to capture retail investors' lottery preference. To measure stock market participation, they use five different macro-level measures from various angles. They perform the time series regression analysis in their empirical study.FindingsFirst, the validation tests show that the lottery preference index in this study is reasonable. Further, the authors find that lottery preference increases people's propensity to enter and trade in the stock market. Besides, they find that the effect on trading behavior is asymmetric, that is, high lottery preference has a more significant impact on trading behavior than low lottery preference. However, lottery preference has no significant effect on the stockholding.Originality/valueThis paper contributes to the growing literature that examines the determinants of stock market participation and the role of lottery/gambling preference in the financial market. It also provides direct and novel evidence for Statman's (2002) conclusions about the similarity of lottery players and stock traders.

The role of internet in stock market participation: just a matter of habit?

2018 ◽  
Vol 31 (3) ◽  
pp. 869-885 ◽  
Author(s):  
Sara Fernández-López ◽  
Lucía Rey-Ares ◽  
Milagros Vivel-Búa
Keyword(s):  
Stock Market ◽  
Internet Usage ◽  
Necessary Condition ◽  
The Internet ◽  
Market Participation ◽  
Content Type ◽  
Stock Market Participation ◽  
Internet Users ◽  
Social Multiplier ◽  
Use Of The Internet

Purpose The purpose of this paper is to adopt a behavioural approach to explain how the internet use influences stock market participation (SMP) decisions. Design/methodology/approach Drawing on the literature on sociability and SMP, this paper analyses whether virtual sociability affects SMP decision in a sample of 34,715 individuals in 14 European countries. Findings The results show that internet users are more likely to be stockowners. However, the obtained evidence does not support either an informational effect or a social multiplier effect of the virtual sociability. After controlling by the country’s SMP rates, a positive effect of internet usage on SMP decision remains, suggesting that contextual factors matter rather than internet usage per se. Thus, in countries where individuals are “used” to being stockholders, the habit of using internet increases SMP, but the “breeding ground” is a necessary condition. Originality/value The massive use of the internet provides a valuable opportunity to find evidence of the frictional costs which would act as inhibitors of the SMP, as economic theory hypothesised. After some promising results, the differences in the evolution of both the SMP and internet usage rates have not confirmed the initial enthusiasm. In addition, the question of why the SMP rates systematically differ across countries still remains open.

Examining the Level of Financial Literacy among Saudi Investors and Its Impact on Financial Decisions

2014 ◽  
Vol 1 (1) ◽  
pp. 312 ◽  
Author(s):  
Tariq Saeed Mian
Keyword(s):  
Stock Market ◽  
Financial Literacy ◽  
Financial Services ◽  
Negative Relationship ◽  
Retirement Planning ◽  
Market Participation ◽  
Financial Decisions ◽  
Stock Market Participation ◽  
Financial Decision ◽  
The Impact

Financial literacy and information requires that a person knows and understands the forms, functions and use of money and financial services. In today’s world financial literacy is important to every individual who wishes to select the best way to carry out payments and take care of banking issues. The current paper examines the impact of different demographic variables on the level of financial literacy among Saudi investors. Furthermore, the impact of financial literacy on different kinds of financial decision making is also investigated. The result of the current study confirms a significant impact from gender and age on financial literacy. Males are more financially literate than females, and older people also show a higher level of financial literacy compared with younger people. There is no significant impact from educational level and current work situation on financial literacy. Financial literacy is measured in reference to retirement planning and stock market participation.  People with a higher level of financial literacy have a greater urge to engage in retirement planning and stock market participation. However, there is a negative relationship between financial literacy and the need for financial advice. 

scholarly journals Policy implications and impact of household registration system on Peasants’ Willingness to return rural residential lands: Evidence from household survey in rural China

2016 ◽  
Vol 63 (1) ◽  
pp. 135-146 ◽  
Author(s):  
Xu Hengzhou ◽  
Liu Yuexi
Keyword(s):  
Negative Impact ◽  
Rural China ◽  
Household Survey ◽  
Policy Implications ◽  
Residential Land ◽  
Household Registration ◽  
Registration System ◽  
Household Registration System ◽  
Rural Residential Land ◽  
The Impact

Despite a growing body of literature on China?s household registration system and rural land transfer, few studies have examined the impact of the household registration system on peasants? willingness to return rural residential land. This paper aims to fill this gap and uses household survey data to measure the impacts of household registration system on peasants? willingness to return rural residential land. The results show that the household registration system reduced the farmers? enthusiasm to exit the rural residential land, that is, household registration system had a significant negative impact on farmers? willingness to return rural residential land.

Sign in / Sign up

Export Citation Format

Share Document