The Study On The Influence Of Social Network On Household Financial Asset Allocation

According to the traditional asset allocation theories,rational economic actors will hold a certain proportion of risky financial assets.The allocation ratio is only related to the risk attitude of the individual and the ratio has nothing to do with other factors.However,the reality is that the rate of family risky financial assets of are relatively low.The academic world calls this phenomenon the household financial market"limited participation".Many scholars explain this phenomenon from the perspective of family wealth level,income,risk preference,and background risk.In recent years,with the application of social network theory in the fields of economics and finance research,more and more scholars have studied the family financial issues from the perspective of social networks.In this paper,we attempts to use the family's social network to explain the-phenomenon of "limited participation" from the view of sociology.Firstly,the paper discusses the influencing mechanisms of social network on household financial assets allocation on the basis of social network theories and asset allocation theories.The influencing mechanisms of social networks on household financial assets allocation mainly include information transmission mechanism,financing mechanism,risk attitude mechanism,and resource acquisition mechanism.Secondly,the paper uses relevant data to describe the present situation of China's household asset allocation,and draws the following conclusions:The scale of China's household total assets and net assets grows year by year.The proportion of real estate in the family's total assets is the highest,and the bank's financial assets in urban and rural households deposits all accounted for a high proportion,and the allocation of risky financial assets was relatively low.The size of urban households'financial assets is higher than that of rural households,and the proportion of risky financial assets of rural households was significantly lower than that of urban households.Then on the basis of the 2011 China Household Finance Survey(CHFS),using Probit and Tobit econometric models,we did an empirical research of the impact of social network on household financial asset allocation by using the total family income and expenditure as well as household communication expenditure as a proxy variable for social network.The analysis results show that the social network has a significant positive impact on household participation in risky financial asset investment and private lending,and there is a clear urban-rural difference in the impact of social networks on the allocation of household financial assets.Considering the endogeneity of social network proxy variables,this paper uses "Whether the families are local"and "How long the families live locally" as the instrument variable of social network to do two stage regression,we come to the same result.Finally,we conclude the full text and puts forward some policies and suggestions based on the conclusions.