Financial literacy among Chinese rural households and its impact on stock-market participation

IF 6.3 2区 经济学 Q1 BUSINESS, FINANCE
Min Zhao , Ya Dai , Haiyang Chen , Zheng Li
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Abstract

This study explores financial literacy (FL) and its influence on market participation among rural residents in China. Using the 2017 China Household Finance Survey, we find that rural residents have low FL and answer only 33% of basic and 20.8% of advanced questions on average. The findings indicate a substantial disparity in their FL skills. The ordinary least squares regression results reveal that advanced FL is statistically positively related to market participation. To mitigate endogeneity concerns, we adopt the instrument variable estimator within the generalized method of moment (IV-GMM). The IV-GMM results indicate that FL positively affects the market participation of Chinese rural households. The probability of market participation increases by over 7% with every unit increase in advanced FL scores. Additionally, the robustness tests confirm the positive correlation between advanced FL and market participation. Furthermore, the impact of FL on stock-market participation is more pronounced among rural residents in economically developed regions and those with greater financial assets.

中国农村家庭的金融知识及其对股市参与的影响
本研究探讨了中国农村居民的金融素养(FL)及其对市场参与的影响。利用 2017 年中国家庭金融调查,我们发现农村居民的金融知识水平较低,平均仅能回答 33% 的基础问题和 20.8% 的高级问题。调查结果表明,农村居民的FL技能存在很大差距。普通最小二乘法回归结果显示,高级财务自由与市场参与在统计上呈正相关。为了减少内生性问题,我们采用了广义矩法(IV-GMM)中的工具变量估计法。IV-GMM 结果表明,FL 对中国农村家庭的市场参与度有积极影响。FL 高级得分每增加一个单位,市场参与概率就会增加 7%以上。此外,稳健性检验也证实了高级 FL 与市场参与之间的正相关性。此外,FL 对股票市场参与度的影响在经济发达地区和拥有较多金融资产的农村居民中更为明显。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
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来源期刊
CiteScore
7.60
自引率
3.80%
发文量
130
审稿时长
26 days
期刊介绍: Peer Review under the responsibility of Borsa İstanbul Anonim Sirketi. Borsa İstanbul Review provides a scholarly platform for empirical financial studies including but not limited to financial markets and institutions, financial economics, investor behavior, financial centers and market structures, corporate finance, recent economic and financial trends. Micro and macro data applications and comparative studies are welcome. Country coverage includes advanced, emerging and developing economies. In particular, we would like to publish empirical papers with significant policy implications and encourage submissions in the following areas: Research Topics: • Investments and Portfolio Management • Behavioral Finance • Financial Markets and Institutions • Market Microstructure • Islamic Finance • Financial Risk Management • Valuation • Capital Markets Governance • Financial Regulations
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