Social Network And Household Portfolio Choice

How does the household use financial instruments to accumulate its wealth in the uncertain economy is a growing concern? With the development of financial market and the increase of household disposable income in China, the ratio of financial assets to total assets of households goes up, and household behavior for portfolio choice become more and more complicated. Household property is no longer the single deposit, they begin to participate in stocks, funds, bonds, precious metals investment. However, compared with the rich ones financial asset selection, Chinese households show the heterogeneity characteristic which allocate more savings as financial assets and lower risky financial assets. The traditional capital asset pricing theory considers that a large of households will invest some percentage of their wealth to all risky assets. Why a lot of households are not involve in risky assets investment? Why Chinese households risky assets participation rates and depth are far lower than developed countries? This article attempts to analyze this question from the social network and credit constraints, therefore we also attempts to further verify the social network indeed influence on the credit constraints which considering the social network may be influence on household portfolio choice by reduce household credit constraints.In the dissertation major contents are as follows:The first chapter is the purpose and significance, research background and basis of this topic, and we illustrate the study route and the technology route and the innovation of the article.The second chapter combed related literature of the household portfolio choice, social network, credit constraint. About the household portfolio choice literature, first introduces the traditional theory of capital asset pricing, then review the causes of differences in household portfolio choice in reality. About social network literature, respectively review the definition, measurement of social network theory, social network, social network, social network effects. About credit constraint literature, We summarize the definition of credit rationing, the causes of credit constraints, the measuring method of credit constraints.The third chapter tells the story of family household portfolio characteristics, First of all, the article respectively with Survey of Consumer Finance and The Eurosystem Household Finance and Consumption Survey data analyze household portfolio characteristics. Then, we use China Household Finance Survey data analysis of the characteristic of Chinese family assets selection. Finally, summarizes the heterogeneity of Chinese household portfolios compared with Americ and Europe. The fourth chapter to the sixth chapter is the core part of this article, These chapters mainly consists of three papers, respectively on social networks, credit constraints influence on the household portfolio choice, social network influence on household credit constraints.The fourth chapter mainly research on social network and household participate in stock market, we choose money spending, cash income, cash gift exchanges and communication fee respectively from a number of angles to measure social network. Using Probit and Tobit model considering social network affect on household stock market participation rates and depth, in order to overcome the social network of endogenous impact on estimation results, this chapter select other household gift spending mean as a tool variables in carry out two phase estimation. Further, this chapter examines the social network dynamic effect on stock market participation compare with the financial development.The fifth chapter the social network and household credit constraints, we use Probit model with needs to recognize influence of the social network impact on domestic demand for credit and credit constraints, using Tobit model respectively to investigate the social network's influence on the household formal credit and folk lending. In this chapter alike the fifth chapter, in order to overcome the social network of endogenous impact on estimation results, we select other household gift spending mean as a tool variables in carry out two phase estimation. On this basis, we further explore the influence mechanism of social networks on credit constraints.The sixth chapter mainly studies mainly studies the credit constraints and the household portfolio choice. We use the direct information from the questionnaire to examine the credit constraints with the two aspects of formal credit supply and demand, and use Probit model to estimate the probability of household affected by the credit constraints, in order to measure the credit constraints. In this paper, risk assets will be divided into four levels, include stock assets, financial risk assets, financial risk assets+investment property, Financial risk assets+investment property+commercial property, using Probit and Tobit model considering social network affect on household stock market participation rates and depth, in order to overcome the credit constraints of endogenous, this chapter selected distance from community to the city as a tool variable, using the maximum likelihood estimation method to estimate two phase.The seventh chapter is mainly conclusions and policy suggestions, summarizes the main findings of research, and on this basis, put forward the corresponding policy recommendations.Major conclusions in the dissertation:(1) Social network has significant positive influence in Chinese families participate in the stock market. The greater social network, the more probability and the higher depth of family is to participate in the stock market. With the improvement of the financial market, the role of social network on stock market participation has not weakened but strengthened. This suggests that non-market forces played an important role in domestic stock market participation. Financial development will further strengthen the social network influence on family participation and depth in the stock market.(2) Credit constraint has significant negative effects on Family risk capital participation and participate in depth. Therefore, credit constraint is one of the important factors restricting family asset allocation optimization.(3) Those family which have the characters of small scale assets, low household income, risk aversion, the household registration in rural, low level of education, no endowment insurance, head of the household are women's family, often have low risk assets participation and participate in depth.(4) Social network will promote the demand of the family credit, and relieve the family credit constraints. For families in debt, social network has significant positive effects on household borrowing.The influence of the formal borrowing is bigger than the influence of folk borrowing which illustrates "Relationship" has played a very important role on the family getting formal loans. The folk lending mainly depends on the relationship of "Relationship" close degree.Policy implications are:(1) The government should strengthen the construction of socialist harmonious community, effective release family social network safeguard function. Family should actively establish extensive and high quality social network, which will help families to increase demand for credit, ease credit constraints, thereby increasing family welfare level.(2) Should increase household disposable income, Lower family income uncertainty expectation, improve the social security system.(3) Compared to urban families, rural households are more susceptible to credit constraints, therefore, the government should actively improve the rural financial environment, expand the rural financial services, encourage and promote the development of rural credit cooperatives, village banks and microfinance companies which are new financial institutions.(4) We should regulate the order of capital market, improve the capital market structure, protect small investors' rights, and increase the information transparency of financial markets. In the same time, formulate a more strict punishment system for investors irregularities, support such as social security fund and enterprise annuity's development, form a diversified investment structure, broaden the family investment channels, help family asset optimization configuration and conducive to promoting the transformation of savings into investment.