The long-lasting effects of experiencing communism on attitudes towards financial markets

Christine Laudenbach, Ulrike Malmendier and Alexandra Niessen-Ruenzi

No 429, SAFE Working Paper Series from Leibniz Institute for Financial Research SAFE

Abstract: We show that exposure to anti-capitalist ideology can exert a lasting influence on attitudes towards capital markets and stock-market participation. Utilizing novel survey, bank, and broker data, we document that, decades after Germany's reunification, East Germans invest significantly less in stocks and hold more negative views on capital markets. Effects vary by personal experience under communism. Results are strongest for individuals remembering life in the German Democratic Republic positively, e. g., because of local Olympic champions or living in a "showcase city". Results reverse for those with negative experiences like religious oppression, environmental pollution, or lack of Western TV entertainment.

Keywords: Capital markets; Anti-capitalist Ideology; Life-time Experiences; Stockmarket Participation (search for similar items in EconPapers)
JEL-codes: D14 D83 D91 G41 P10 P26 P34 P36 (search for similar items in EconPapers)
Date: 2024
New Economics Papers: this item is included in nep-ban, nep-env and nep-his
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:safewp:303039

DOI: 10.2139/ssrn.3526926

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