The Impact of Demographic Aging on the Investing Behavior: The Case of Taiwan Stock Market

Demographic transition has already become a major issue in the recent decades. Lower fertility rate and higher expected life length result in population aging. Most developed countries face social problems due to demographic transitions, especially in the economic and financial field. To take a closer look at this phenomenon, this paper screened 99 stocks provided by Taiwan Stock Exchange (TSE) to explore the impact of population aging on the stock market in Taiwan. Population aging indirectly takes up a larger portion of elder investors in the stock market, compared to the past. This paper employed risk and return variables to analyze the investors’ behaviors in Taiwan stock market. We divided our samples into whole industry, financial industry, technology industry, and traditional industry groups to find the impact of investors aging among different industries. The results showed that there is no significant evidence to prove that the elder investors pursue lower risk stocks in Taiwan stock market, which is inconsistent with the results of the past research. On the other hand, the findings from the whole industry, technology industry, and traditional industry groups are different from the past research results, showing that Taiwan’s elderly investors prefer stocks with higher return in those industries.