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Social Interaction and Stock Market Participation: Evidence from British Panel Data

Author

Listed:
  • Brown, Sarah

    (University of Sheffield)

  • Taylor, Karl

    (University of Sheffield)

Abstract

This paper uses data from the British National Child Development Study to investigate the relationship between social interaction and participation in the stock market through holding stocks and/or shares at the individual level. In accordance with the existing literature, the results reveal that a positive relationship exists between social interaction and stock market participation, when both are measured concurrently. Furthermore, this relationship prevails across a range of measures of social interaction and social capital. In addition, we make a potentially important contribution to the existing literature by exploiting the panel nature of the data in order to explore the robustness of the cross-sectional findings. We find that the positive relationship between stock market participation and social interaction prevails within a fixed effects logit framework, which controls for time invariant unobserved effects.

Suggested Citation

  • Brown, Sarah & Taylor, Karl, 2010. "Social Interaction and Stock Market Participation: Evidence from British Panel Data," IZA Discussion Papers 4886, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp4886
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    Cited by:

    1. Fortunato Michael W-P & Alter Theodore R, 2011. "The Individual-Institutional-Opportunity Nexus: An Integrated Framework for Analyzing Entrepreneurship Development," Entrepreneurship Research Journal, De Gruyter, vol. 1(1), pages 1-36, January.
    2. Białkowski, Jędrzej & Etebari, Ahmad & Wisniewski, Tomasz Piotr, 2012. "Fast profits: Investor sentiment and stock returns during Ramadan," Journal of Banking & Finance, Elsevier, vol. 36(3), pages 835-845.
    3. Nida Shah & Muhammad Nadeem Qureshi & Yasra Aslam, 2017. "An Empirical Investigation of Islamic Calendar Effect in Global Islamic Equity Indices," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 9(6), pages 57-68, June.
    4. Wei Cui & Insook Cho, 2019. "Household’s Happiness and Financial Market Participation," Global Economic Review, Taylor & Francis Journals, vol. 48(4), pages 396-418, October.
    5. Yunqiu Zhan & Shuwen Yang, 2024. "Does internet use improve employment?——Empirical evidence from China," PLOS ONE, Public Library of Science, vol. 19(4), pages 1-17, April.
    6. Al-Khazali, Osamah & Bouri, Elie & Roubaud, David & Zoubi, Taisier, 2017. "The impact of religious practice on stock returns and volatility," International Review of Financial Analysis, Elsevier, vol. 52(C), pages 172-189.

    More about this item

    Keywords

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    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations

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