Financial Literacy, Human Capital and Stock Market Participation in Europe

Thomas, Ashok; Spataro, Luca

doi:10.1007/s10834-018-9576-5

Cited by 61 publications

(51 citation statements)

References 53 publications

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“…In the previous literature, FL has been commonly accepted as one of the significant factors influencing the ability of individuals to make financial decisions (cf. Sivaramakrishnan et al , 2017; Mouna and Anis, 2017; Thomas and Spataro, 2018), and it is arguably documented that deficiencies in FL contribute to inertia and suboptimal financial decision-making.…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Past behaviour, financial literacy and investment decision-making process of individual investors

Raut

2020

IJOEM

148

113

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PurposeThis study aims to explore the importance of past behaviour and financial literacy in the investment decision-making of individual investors and examines the validity of the theory of planned behaviour in this context.Design/methodology/approachThe study used a self-administered questionnaire and adopted the convenience sampling technique followed by a snowball sampling method for the survey to collect data from the individual investors covering the four distinct states of India. Collected data were analysed on AMOS 20.0 using two-step structural equation modelling (SEM).FindingsResults indicated a significant effect of all the predictive variables. Past behaviour showed no significant direct impact on investor's intention; however, it had an indirect significant relationship while mediated by the attitude of investors. The multiple squared correlation (R2) showed that the final model could explain 36% of the variance in investors' intention towards stock investment which signified a successful implementation of the TPB model along with external variables added to it. Moreover, Indian investors were found to be highly influenced, primarily, by social pressure which could be curbed through financial literacy.Practical implicationsA significant importance of subjective norms was found on stock market participation which could be a strategic theme for the government and the policymakers to educate investors through their opinion leaders for increasing their participation. Moreover, by doing so investors could control their behaviour and take rational decisions.Originality/valueThis study extended the understandings of investor's decision-making behaviour using TPB by incorporating the two external variables viz., Financial literacy and past behaviour. The addition of past behaviour is perhaps the novelty of this article since such examination has not been conducted empirically especially in the case of developing countries like India.

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Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Past behaviour, financial literacy and investment decision-making process of individual investors

Raut

2020

IJOEM

148

113

View full text Add to dashboard Cite

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“…They recommended that geographic location should be an important consideration in research on financial socialization alongside measures of socialization agents such as parents, peers, siblings, school, and media. A study of nine European countries similarly emphasized the importance of considering geographic location in relation to financial socialization outcomes (Thomas and Spataro 2018 ). Specifically, through investigating differences in stock market participation across the nine countries, while the researchers were able to attribute some differences in participation to differences in financial literacy, the education system, and the attractiveness of the stock markets, unexplained differences between countries still persisted that are likely due to macro-level differences in culture, attitudes towards risk, and other unobserved factors.…”

Section: Empirical Documentation For Financial Socialization Outcomesmentioning

confidence: 99%

Financial Socialization: A Decade in Review

LeBaron

Kelley

2020

J Fam Econ Iss

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“…Recent research has found that lower levels of financial literacy are positively associated with negative outcomes, such as the use of credit with higher costs (Gathergood 2012), debt loads (Lusardi and Tufano 2015), lower savings (Babiarz and Robb 2014), irresponsible use of credit cards (Robb 2011) and lower participation in the stock market (Thomas and Spataro 2015). Given the important outcomes of FL, past research has made some efforts to uncover its antecedents, namely among young people.…”

Section: Research Background Financial Literacymentioning

confidence: 99%

Regulatory Focus, Money Attitudes and Financial Literacy: Evidence from Portuguese Young Adults

Pereira

Coelho

2020

J Fam Econ Iss

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This paper proposes that the type of an individual's motivational forces underlies his/her willingness and ability to acquire financial literacy (FL), whose outcomes ultimately shape consumers' well-being. Specifically, we study the FL of young adults, relying on regulatory focus (RF) theory, which considers two motivational systems, namely a prevention and a promotion system. Using a sample of 682 students from a Portuguese public university we examine the relationship between RF and FL, considering the mediating effect of money attitudes (MA). To test the research hypotheses we rely on structural equation modelling. The results provide support for our predictions. Prevention is negatively related to FL, and promotion is positively related to it. Moreover, prevention positively relates to power-prestige, distrust, and anxiety, and negatively relates to retention-time, whereas promotion is positively associated with retention-time and negatively with distrust. The relationship between RF and FL is partially mediated by MA. Hence, this study tests a number of novel relationships, yielding relevant policy implications.

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Financial Literacy, Human Capital and Stock Market Participation in Europe

Cited by 61 publications

References 53 publications

Past behaviour, financial literacy and investment decision-making process of individual investors

Past behaviour, financial literacy and investment decision-making process of individual investors

Financial Socialization: A Decade in Review

Regulatory Focus, Money Attitudes and Financial Literacy: Evidence from Portuguese Young Adults

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