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Religious beliefs and stock market participation: Evidence from urban households in China

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  • Xu, Ziyao
  • Ma, Junfeng
  • Li, Donghui
  • Fu, Wentao

Abstract

This paper investigates how religious beliefs affect urban household stock market participation in China. We use the China Household Finance Survey in 2013 to show that religious beliefs inhibit total stock market participation and its increment. Such a negative effect is significant only for Buddhists and Protestants in China. We provide a new explanation from the perspective of expected utility maximization. Specifically, religious activities crowd out the time spent on improving financial literacy and lower the commercial insurance expenses that reduce risks in an individual’s current life. Our results hold after considering the potential endogeneity problem and various robustness tests.

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  • Xu, Ziyao & Ma, Junfeng & Li, Donghui & Fu, Wentao, 2022. "Religious beliefs and stock market participation: Evidence from urban households in China," Research in International Business and Finance, Elsevier, vol. 63(C).
    • Handle: RePEc:eee:riibaf:v:63:y:2022:i:c:s0275531922001817
    DOI: 10.1016/j.ribaf.2022.101795
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    More about this item

    Keywords

    Religion; Stock market participation;

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • Z12 - Other Special Topics - - Cultural Economics - - - Religion

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