Research On The Influencing Factors Of Household Financial Asset Allocation

The family is the basic unit of the economy and plays an indispensable role in the healthy operation of the national economic system.The financial behavior of the family sector will affect the development path of the entire national financial industry on a macro level.The report of the 20 th National Congress of the Communist Party of China proposed to strive to increase the proportion of residents’ income in national income distribution,and to explore multiple channels to increase the property income of urban and rural residents.Participating in household asset allocation is an important channel for residents to obtain property income,therefore,the reasonable allocation of household assets is a necessary guarantee for achieving this goal.However,the current situation in China is that the overall allocation of financial assets by residents’ households presents a characteristic of "limited participation",that is,the variety of financial assets held is relatively single,and there are still a few households willing to invest in risky financial assets.The lack of motivation for residents to participate in investment is not only due to the development of China’s macroeconomic and financial markets,but also due to the level of residents themselves.This paper attempts to explore the influencing factors and mechanisms of household financial asset selection behavior from the perspective of China’s urbanization process.Through reading and sorting out relevant literature,this paper summarizes the shortcomings of previous research,and based on the new perspective of population mobility from rural to urban areas,reintegrates relevant theories,proposes theoretical hypotheses,and constructs econometric models to further supplement the current research results in household finance.This paper combines theories,such as branding theory,social network theory,to analyze,and then proposes a pair of competitive hypotheses,that is,the background of residents moving from rural to urban areas may either encourage them to participate more in financial market investment,or,conversely,reduce their investment behavior.At the same time,this paper puts forward the hypothesis of the effect channel of residents’ mobility experience on household financial asset allocation behavior,and speculates that the three variables of financial literacy,household income,and social network may play a mesomeric effect between them.Specifically,the experience of mobility may enhance residents’ financial literacy or household income,which in turn helps them increase their financial asset allocation behavior.On the contrary,it may also reduce the tightness of residents’ social networks,thereby inhibiting their financial asset allocation behavior.This paper uses the data from the 2019 CHFS questionnaire for empirical analysis,and uses the registered residence type of respondents to reflect whether they have migration experience,and establishes the probit model and Tobit model for regression analysis.The results indicate that the experience of population mobility will increase the likelihood of households purchasing risky financial assets,and also increase the allocation proportion of risky financial assets in the total financial assets of households.In terms of robustness test,this paper uses the propensity score matching(PSM)method to automatically match samples with similar values of control variables,and manually select samples with similar background characteristics to increase the comparability between the treatment group and the control group samples.The estimated results after processing are still robust.In heterogeneity analysis,this paper groups the sample data using three variables: head of household gender,age,and household income to examine whether there are differences in the impact of migration experience on the financial asset allocation behavior of different populations.The regression analysis results show that regardless of whether the head of household is male or female,regardless of household income,migration experience will have a boosting effect on households’ participation in financial market investment behavior;Only when the homeowner is middle-aged,the migration experience will enhance the family’s tendency to participate in financial market investments.Further,this paper examines whether the mesomeric effect of financial literacy,family income,and social network is tenable,and finds that the mesomeric effect of financial literacy and family income is significant,while the mesomeric effect of social network is not significant,indicating that migration experience will promote residents to enhance financial literacy,increase income,and therefore improve the tendency to allocate financial assets.Based on the above research conclusions,this paper points out that The urbanization process may lead to more households participating in financial market investments in the future to achieve asset preservation and appreciation,which has positive significance for the reasonable pricing of China’s financial market,the healthy development of the financial industry,and the optimal allocation of social resources.Finally,this paper proposes a series of policy recommendations,including promoting the structural reform of the financial supply side,improving the financial regulatory system,and cultivating the financial literacy of ordinary people,especially rural residents.It is hoped that the theoretical exploration of this paper can further improve the research results of domestic academia in the field of household finance,help policy makers to have a deeper insight into China’s microeconomics situation,so as to better guide families to allocate assets reasonably and promote the healthy development of financial markets and macro-economy.