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

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.

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

Review of Behavioral Finance ◽

10.1108/rbf-12-2019-0177 ◽

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.

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Social Interaction and Stock Market Participation: Evidence from China

Mathematical Problems in Engineering ◽

10.1155/2014/906564 ◽

2014 ◽

Vol 2014 ◽

pp. 1-9 ◽

Cited By ~ 1

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.

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

Lahore Journal of Business ◽

10.35536/ljb.2018.v7.i1.a3 ◽

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.

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

International Journal of Accounting and Financial Reporting ◽

10.5296/ijafr.v4i2.6487 ◽

2014 ◽

Vol 1 (1) ◽

pp. 312 ◽

Cited By ~ 2

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.

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