Financial Sophistication, Personality and Stock Market Participation: Theory and Evidence
In this empirical study, the authors examined the extent to which financial sophistication and personality effects stock market participation. Using archival research methodology, our hypothesis has been tested on a random sample of 451 stock market participants. Moderation has been tested through...
Saved in:
| Main Authors: | , , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Lahore School of Economics
2018-10-01
|
| Series: | The Lahore Journal of Business |
| Subjects: | |
| Online Access: | https://journals.lahoreschool.edu.pk/LJB/LJB/article/view/69 |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| _version_ | 1850035386858864640 |
|---|---|
| author | Muhammad Akhtar Dr. Faqir Muhammad Dr. Muhammad Ayub Siddiqui |
| author_facet | Muhammad Akhtar Dr. Faqir Muhammad Dr. Muhammad Ayub Siddiqui |
| author_sort | Muhammad Akhtar |
| collection | DOAJ |
| description |
In this empirical study, the authors examined the extent to which financial sophistication and personality effects stock market participation. Using archival research methodology, our hypothesis has been tested on a random sample of 451 stock market participants. Moderation has been tested through Andrew Hayes process. Extroversion and openness to experience positively impact stock market participation, while consciousness, agreeableness, and neuroticism have a negative impact. Financial literacy, trading experience and gender are the likely paths by which personality impacts stock market participation. Financial literacy can modify the relationship between some basic personality traits and stock market participation. It shows that behavior finance is not completely predetermined by one’s DNA and also identifies which traits are less influenced by financial literacy. Perhaps this implies that these traits are more predetermined by one’s innate characteristics. This study provides an interdisciplinary contribution by extending Big Five taxonomy as a viable approach for stock market participation. Future research may investigate the impact of family resources, investment exposure, and parent’s financial literacy, which were beyond the scope of the current study. The theoretical and practical implications of the study with respect to stock market participation are discussed.
|
| format | Article |
| id | doaj-art-74647a597c994d2da944b5aa6a8c0c7a |
| institution | DOAJ |
| issn | 2223-0025 2791-3139 |
| language | English |
| publishDate | 2018-10-01 |
| publisher | Lahore School of Economics |
| record_format | Article |
| series | The Lahore Journal of Business |
| spelling | doaj-art-74647a597c994d2da944b5aa6a8c0c7a2025-08-20T02:57:30ZengLahore School of EconomicsThe Lahore Journal of Business2223-00252791-31392018-10-0171Financial Sophistication, Personality and Stock Market Participation: Theory and EvidenceMuhammad Akhtar0Dr. Faqir Muhammad1Dr. Muhammad Ayub Siddiqui2 Assistant Professor, FAST School of Management, National University of Computer & Emerging Sciences, Islamabad. Professor, Air University School of Management (AUSOM), Faculty of Administrative Sciences, Air University, Islamabad. Professor, FAST School of Management, National University of Computer & Emerging Sciences, Islamabad. In this empirical study, the authors examined the extent to which financial sophistication and personality effects stock market participation. Using archival research methodology, our hypothesis has been tested on a random sample of 451 stock market participants. Moderation has been tested through Andrew Hayes process. Extroversion and openness to experience positively impact stock market participation, while consciousness, agreeableness, and neuroticism have a negative impact. Financial literacy, trading experience and gender are the likely paths by which personality impacts stock market participation. Financial literacy can modify the relationship between some basic personality traits and stock market participation. It shows that behavior finance is not completely predetermined by one’s DNA and also identifies which traits are less influenced by financial literacy. Perhaps this implies that these traits are more predetermined by one’s innate characteristics. This study provides an interdisciplinary contribution by extending Big Five taxonomy as a viable approach for stock market participation. Future research may investigate the impact of family resources, investment exposure, and parent’s financial literacy, which were beyond the scope of the current study. The theoretical and practical implications of the study with respect to stock market participation are discussed. https://journals.lahoreschool.edu.pk/LJB/LJB/article/view/69Financial sophisticationbig five personality traitsbehavioral financestock market participation. |
| spellingShingle | Muhammad Akhtar Dr. Faqir Muhammad Dr. Muhammad Ayub Siddiqui Financial Sophistication, Personality and Stock Market Participation: Theory and Evidence The Lahore Journal of Business Financial sophistication big five personality traits behavioral finance stock market participation. |
| title | Financial Sophistication, Personality and Stock Market Participation: Theory and Evidence |
| title_full | Financial Sophistication, Personality and Stock Market Participation: Theory and Evidence |
| title_fullStr | Financial Sophistication, Personality and Stock Market Participation: Theory and Evidence |
| title_full_unstemmed | Financial Sophistication, Personality and Stock Market Participation: Theory and Evidence |
| title_short | Financial Sophistication, Personality and Stock Market Participation: Theory and Evidence |
| title_sort | financial sophistication personality and stock market participation theory and evidence |
| topic | Financial sophistication big five personality traits behavioral finance stock market participation. |
| url | https://journals.lahoreschool.edu.pk/LJB/LJB/article/view/69 |
| work_keys_str_mv | AT muhammadakhtar financialsophisticationpersonalityandstockmarketparticipationtheoryandevidence AT drfaqirmuhammad financialsophisticationpersonalityandstockmarketparticipationtheoryandevidence AT drmuhammadayubsiddiqui financialsophisticationpersonalityandstockmarketparticipationtheoryandevidence |