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Research Of Population Structure’s Influence On Stock Market Prices

Posted on:2014-11-19Degree:MasterType:Thesis
Country:ChinaCandidate:T T RenFull Text:PDF
GTID:2267330425992463Subject:Finance
Abstract/Summary:PDF Full Text Request
It is inevitable for both developed and developing countries to face one of the hottest issues,aged tendency of population in the present century. It has affected economy through two ways mainly, savings and investments. The paper is aimed to analyze the impact of aging of population on capital markets, especially on the stock market. The analysis lies on two perspectives. On one hand, the aging of population would slow down the speed of economic growth, which is adverse to the development of the stock market. This can be summarized by macro-level analysis. On the other hand, it focuses on the analysis of investor behavior. As is known to persons, according to life cycle theory, the aged tend to less prefer to asset with high risks, which has negative effects on stock market. It can be described as microscopic aspects.This paper combines theory analysis with the empirical together to analyze the impact of aging population on stock market. In the part of theoretical analysis, it is analyzed according to main theories, demographic dividend theory and life cycle theory. As is analyzed by the former theory, abundant of young persons promote economic growth. Thus,aged persons have a positive effect on the development of stock market since it made the pace of economic growth slow. The life cycle theory is focused on the analysis of the investor’s risk appetite on the allocation of financial assets at different periods in his life. Since the aged has low risk appetite, it has a negative effect on the stock market development. In the part of empirical analysis, eight countries, the United States, South Africa, Japan, the European debt five countries are be picked to analyze the relationship between aged population and the stock price, based on demographic data and stock market data about investors all ages constitute, risk preference, income level, income proportion of funds invest in the stock market.It shows that the population structure is closely related to stock market’s price. Here are the conclusions. Flange population is defined as the number of the next generation who would like to buy stocks. It is testified that the number of saving population and the flange population increasing can promote the development of stock market, while the decreasing of the number of saving and flange population have a negative impact on the development of the stock market. Besides, Population age distribution characteristics can also influence the development of a country’s stock market. The distribution characteristics of elderly population being more than young people less average age increases the number of investors, while the opposite change of the number will have a negative impact on the development of the stock market. Countries with less aged persons compared with the number of the young enjoy better development in stock market.It also analyzes the current situation of Chinese stock market. It is well known that China benefit a lot from the demographic dividend, which arising from aging population lower and higher birthrate. However, with increasing of the old population and lower birthrate, demographic dividend window is closed which has a negative impact on the economy. Considering the fact that China’s stock market is not mature, adding factors such ad serious polarization between the rich and the poor, the rapid growth of the stock supply and housing prices growing too rapidly, the slow development of institutional investors, pension system not sound and other factors, the stock market are confronted with high pressure to develop themselves. Solving these problems effectively have a positive effect the healthy development of China’s stock market.
Keywords/Search Tags:Population Structure, the Stock Market, Asset Prices, DemographicDividend, Life Cycle
PDF Full Text Request
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