What drives stock market participation? The role of institutional, traditional, and behavioral factors
Year: 2022
Type: article
Abstract: We analyze stock market participation in 19 European countries, providing a composite view of the interplay and relative importance of established participation drivers. We jointly control for nearly all relevant drivers found in prior studies, which tend to introduce one novel variable at a time and often omit risk-aversion. Excellent full model predictive power decomposes into institutional (country) fixed effects (about 30% of total), traditional individual-level variables (50%), and more recently identified behavioral variables (20%). We sketch a hierarchical framework where factors’ effects vary by agents’ proneness to participate. We also challenge and complement existing interpretations given to sociability, IQ, trust, and life experiences.
Source: Journal of Banking & Finance
Authors: Markku Kaustia, Andrew Conlin, Niilo Luotonen
Institutions: Aalto University, University of Oulu
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: hybrid
Estimated APC paid: $2,620
OpenAlex ID: W4313201683