A Research Of China’s Residential Stock Market Participation From The Perspective Of Social Interactions

ABSTRACT:With the rapid development of China’s stock markets, stock investment became a significant composition of China’s urban residents living financing. Familial investment portfolio, future consumption and welfare were efficiently influenced by residential stock-market participation. However, investors’financial decision often relied on the people’s interactive behavior of social networks, rather than professional knowledge and skills. Individual invest decisions are affected by the behaviors and characteristics of peer group members. Therefore, this paper intended to study China’s residential stock market participation from the perspective of social interactionsSome research indicated that, the social interaction promoted family participate in the stock market, according to the theories foundation and prediction of the corresponding mechanism, this paper studies the reality and different specific mechanism of Chinese stock market. Firstly, we summarize the main influencing factors of residential stock market participation based on historical sources, and analyze the influence path and mechanism that how social interactions affect the stock-market participation. Then we had a statistic analysis of residential stock account and survey data of stock-market participation. The result shows a difference of China’s residential stock market participation in areas and sample characteristics. Finally, we mainly take use of the2011China Health and Retirement Longitudinal Study data, and take the decision-making of stock investment among people45years old and above as a major factor. Our binary logistic empirical analysis assesses the influence of sociability on China’s stock market participation; Furthermore, it explored the specific mechanism it works. The result shows that the social interaction encourages residential stock-market participation in china’s stock market, and the dominate channel of this process is the relative wealth attention, but not the word-of-mouth information or communications.