Securities regulation, household equity ownership, and trust in the stock market

Hans B. Christensen, Mark Maffett () and Lauren Vollon
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Hans B. Christensen: University of Chicago Booth School of Business
Mark Maffett: University of Chicago Booth School of Business
Lauren Vollon: University of Chicago Booth School of Business

Review of Accounting Studies, 2019, vol. 24, issue 3, No 3, 824-859

Abstract: Abstract Using aggregate data from national accounts, we study whether strengthening and harmonizing securities regulation across the European Union increases household equity ownership. We find a significant increase in the proportion of liquid assets invested in equity, both when a household’s own country adopts the regulation and when other countries adopt the regulation. To directly explore the mechanism through which households’ willingness to directly invest in the equity market increases, we show that the effect of securities regulation is stronger in countries where trust is low and between countries where cultural biases are most pronounced.

Keywords: National accounts; Households; Equity ownership; Trust; Securities regulation (search for similar items in EconPapers)
JEL-codes: D03 G14 G18 G38 I18 J28 K22 K32 L71 L72 M41 M48 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (8)

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DOI: 10.1007/s11142-019-09499-8

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