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Social Capital and Stock Market Participation via Technologies: The Role of Households’ Risk Attitude and Cognitive Ability

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  • Ya-Fang Cheng

    (Department of Business Administration, Cheng Shiu University, Kaohsiung 833, Taiwan)

  • Eugene Burgos Mutuc

    (Postgraduate Program in Management, I-Shou University, Kaohsiung 840, Taiwan
    Department of Finance, Bulacan State University, Malolos City 3000, Philippines)

  • Fu-Sheng Tsai

    (Department of Business Administration, Cheng Shiu University, Kaohsiung 833, Taiwan
    Postgraduate Program in Management, I-Shou University, Kaohsiung 840, Taiwan)

  • Kun-Hwa Lu

    (Department of Business Administration, Cheng Shiu University, Kaohsiung 833, Taiwan
    Nan Jehn Natural Gas Co., Ltd., Kaohsiung 833, Taiwan)

  • Chien-Ho Lin

    (Department of Business Administration, Cheng Shiu University, Kaohsiung 833, Taiwan)

Abstract

This article reviews the relation between social capital and stock market participation via new technology. Its purpose is to acquire a thorough understanding of the structural, relational, and cognitive aspects of social capital’s influences and to recommend further empirical research ideas to the existing body of knowledge on household finance. It discusses the consideration of modern and highly technological platforms such as the internet stock market exchange platforms and applications. The stock market participation puzzle remains unsolved despite the progress in explaining the economic rationality behind investors decision making through behavioral finance. Furthermore, the researchers develop four propositions which can expound the existing relationship between social capital dimensions such as the structural, relational, and cognitive aspects and stock market participation of households. Doing so, we discuss the roles of risk attitude and the influence of cognitive ability such as financial awareness, financial literacy, and IQ (intelligence quotient) to enhance the existing body of knowledge. Practically, this article adds valuable ideas in solving the issue of limited participation not just in the stock market but in other financial markets through reflecting on the sociological and (green) technological concepts. Lastly, the implications for sustainable financial markets are elaborated.

Suggested Citation

  • Ya-Fang Cheng & Eugene Burgos Mutuc & Fu-Sheng Tsai & Kun-Hwa Lu & Chien-Ho Lin, 2018. "Social Capital and Stock Market Participation via Technologies: The Role of Households’ Risk Attitude and Cognitive Ability," Sustainability, MDPI, vol. 10(6), pages 1-14, June.
    • Handle: RePEc:gam:jsusta:v:10:y:2018:i:6:p:1904-:d:151130
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