Overseas study experience and family financial market participation: Research based on cultural perspective

Chinese households show limited participation in the allocation of risky financial assets compared with Western developed countries. Besides financial market factors, is this phenomenon related to the spatial cultural differences between China and the West? Based on the imprinting theory, overseas experience will bear the "imprint" of foreign culture and will remain for a long time after returning home. This study explains whether this phenomenon is related to cultural differences and examines the impact of studying overseas on family financial market participation, finding a positive relationship between them. By comparing the cultural differences between China and the West, overseas study experience is found to improve residents’ risk preferences, time preferences, and financial literacy, thereby encouraging stock market participation. Further analysis of the asset allocation of other families shows that the household savings rate and the proportion of housing assets of families studying abroad are lower, which is consistent with those of western countries. This study has implications for culture’s role in limited participation in financial assets.