Social Interaction and Stock Market Participation: Evidence from British Panel Data

(2010) - Sarah Brown, Karl B. Taylor

Journal: SSRN Electronic Journal
Link:: https://www.ssrn.com/abstract=1595527
DOI:: 10.2139/ssrn.1595527
Links::
Tags:: #paper #NCDS
Cite Key:: [@brownSocialInteractionStock2010]

Abstract

This paper uses data from the British National Child Development Study to investigate the relationship between social interaction and participation in the stock market through holding stocks and/or shares at the individual level. In accordance with the existing literature, the results reveal that a positive relationship exists between social interaction and stock market participation, when both are measured concurrently. Furthermore, this relationship prevails across a range of measures of social interaction and social capital. In addition, we make a potentially important contribution to the existing literature by exploiting the panel nature of the data in order to explore the robustness of the crosssectional findings. We find that the positive relationship between stock market participation and social interaction prevails within a fixed effects logit framework, which controls for time invariant unobserved effects.

Notes

“reveal that a positive relationship exists between social interaction and stock market participation, when both are measured concurrently.” (Brown and Taylor, 2010, p. 2)

“positive relationship between stock market participation and social interaction prevails within a fixed effects logit framework, which controls for time invariant unobserved effects” (Brown and Taylor, 2010, p. 2)