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

Author

Listed:
  • Sarah Brown

    () (Department of Economics, The University of Sheffield Author-Person=pbr160)

  • Karl Taylor

    () (Department of Economics, The University of Sheffield Author-Person=pta44)

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

  • Sarah Brown & Karl Taylor, 2010. "Social Interaction and Stock Market Participation: Evidence from British Panel Data," Working Papers 2010008, The University of Sheffield, Department of Economics, revised Apr 2010.
  • Handle: RePEc:shf:wpaper:2010008
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    File URL: http://www.shef.ac.uk/economics/research/serps/articles/2010_008.html
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    References listed on IDEAS

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    Cited by:

    1. 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.
    2. repec:eee:finana:v:52:y:2017:i:c:p:172-189 is not listed on IDEAS

    More about this item

    Keywords

    Social Capital; Social Interaction; Stock Market Participation;

    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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