FinTech, investor sophistication and financial portfolio choices

Leonardo Gambacorta, Romina Gambacorta and Roxana Mihet

No 18173, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper analyses the links between advances in financial technology, investors’ sophistication, and the composition and returns of their financial portfolios. We develop a simple portfolio choice model under asymmetric information and derive some theoretical predictions. Using detailed microdata from Banca d’Italia, we test these predictions for Italian households over the period 2004-20. In general, heterogeneity in portfolio composition and in returns between sophisticated and unsophisticated investors grows with improvements in financial technology. This heterogeneity is reduced only if financial technology is accessible to everyone and if investors have a similar capacity to use it.

Keywords: Inequality; Inclusion; Fintech; Innovation; Matthew Effect (search for similar items in EconPapers)
JEL-codes: D83 G1 G4 G5 L8 O3 (search for similar items in EconPapers)
Date: 2023-05
References: Add references at CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP18173 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Journal Article: FinTech, Investor Sophistication, and Financial Portfolio Choices (2023)
Working Paper: Fintech, investor sophistication and financial portfolio choices (2023)
Working Paper: FinTech, investor sophistication and financial portfolio choices (2023)
Working Paper: FinTech, Investor Sophistication and Financial Portfolio Choices (2023)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:18173

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP18173

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().