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.

Financial Literacy about Stock Market among the Participants of Bombay Stock Exchange

2018 ◽  
Vol 6 (7) ◽  
pp. 173
Author(s):  
Rashmi Mate ◽  
Leena Dam
Keyword(s):  
Stock Market ◽  
Financial Literacy ◽  
Stock Exchange ◽  
Secondary Data ◽  
Basic Knowledge ◽  
Primary Data ◽  
Market Participation ◽  
Market Participants ◽  
Stock Market Participation ◽  
Financial Decision

Financial mistakes made at any stage of life can be costly. To avoid such mistakes, financial literacy is very important. Financial literacy is buzzword now days, and its importance has accepted all over the world. Financial literacy is required for any financial decision making.  But his term is subjective in nature. So it varies according to investors. Investing in stock market is still not so popular in India because of its complicated nature and lack of financial literacy. This paper attempts to find out the literacy levels of stock market participants of Bombay Stock Exchange. Stock market participation is strongly related to financial literacy. Previous research was focused on financial literacy and reasons behind less stock market participation. In this study, stock market participant’s financial literacy regarding stock market functions has been assessed. Those who participate in stock market are considered to be a risk taking investors, and it is expected that investor must have basic knowledge about stock market. BSE is one of the oldest stock market in world. So the participants of BSE will be the great population to test financial literacy levels. This study is based on primary data collected through a survey from BSE participants as well as on secondary data.

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.

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 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.

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