Digital finance era: Will individual investors become better players?

Xiaomeng Lu, Xianjun Zhang, Jiaojiao Guo and Pengpeng Yue

Journal of International Financial Markets, Institutions and Money, 2024, vol. 91, issue C

Abstract: Exploring the intersection of new technologies and financial services, this study probes the role of digital inclusive finance in enhancing the performance of individual investors. Utilizing a unique dataset, we examine the influence of digital inclusive finance in diverse financial environments, particularly focusing on areas with varying levels of traditional financial development and investor protection. Our panel-data statistical model addresses endogeneity concerns, revealing that digital inclusive finance notably boosts investor performance, primarily through enhanced investment diversification and reduced disposition effect. These improvements are more pronounced in regions with underdeveloped traditional finance or robust investor protection. This study not only contributes to understanding the nexus between digital inclusive finance and investor behavior but also suggests policy implications. We recommend leveraging digital financial strategies to empower investors, particularly in less developed financial regions, to maximize the benefits of digital inclusive finance inclusivity.

Keywords: Digital inclusive finance; Investment performance; Individual investors; Disposition effect; Investment diversification (search for similar items in EconPapers)
JEL-codes: D18 G11 G28 G5 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:intfin:v:91:y:2024:i:c:s1042443124000015

DOI: 10.1016/j.intfin.2024.101935

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