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

Sarah Brown () and Karl Taylor

No 4886, IZA Discussion Papers from Institute of Labor Economics (IZA)

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.

Keywords: social capital; social interaction; stock market participation (search for similar items in EconPapers)
JEL-codes: D12 D14 D71 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2010-04
New Economics Papers: this item is included in nep-soc
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Citations: View citations in EconPapers (5)

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Working Paper: Social Interaction and Stock Market Participation: Evidence from British Panel Data (2010)
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