Stock Market Participation and the Internet
Theory indicates that frictions (e.g., information and transaction costs) could account for the lower than expected stock market participation rates. This paper examines the hypothesis that there has been a fundamental change in participation and links this change to the reduction of these frictions by the advent of the Internet. Using panel data on household participation rates over the past decade, the results show computer/Internet using households raised participation substantially more than non-computer using households. The increased probability of participation was equivalent to having over $27,000 in additional household income or over 2.5 more mean years of education.
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| Date of creation: | 2006 |
| Date of revision: | |
| Handle: | RePEc:ags:cudawp:127044 |
| Contact details of provider: | Postal: Fax: 607-255-9984 Web page: http://aem.cornell.edu/ More information through EDIRC
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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Peress, Joel, 2005. "Information vs. Entry Costs: What Explains U.S. Stock Market Evolution?," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 40(03), pages 563-594, September.
- Freund, Caroline L. & Weinhold, Diana, 2004. "The effect of the Internet on international trade," Journal of International Economics, Elsevier, vol. 62(1), pages 171-189, January.
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