| The maturity of investors affects the breadth and depth of the development of national financial industry.Rational investors are an important guarantee to promote the high-quality development of capital markets.In the assumption of traditional financial theory,rational investors take the expected utility maximization as the decision-making goal,and update their beliefs according to Bayes’ rule.However,in the real financial market,there is often a deviation between investors’ decision-making behavior and the predicted results of theoretical models.Based on the research results of psychology,cognitive science and other related disciplines,behavioral finance has confirmed that economic individuals cannot make decisions in full accordance with rational requirements,and show financial behavior that deviates from rationality.Local bias and insufficient decentralization in portfolio construction,over-transactions not to meet liquidity needs or achieve target returns,and the disposal effect are typical irrational behaviors of investors.At the micro level,irrational financial decisions hinder investors from sharing the dividend of market reform and damage investors’ personal financial well-being.At the macro level,the irrationality of investors often leads to the disorder of market price mechanism,and the function of financial market to allocate capital resources reasonably cannot be effectively played.Therefore,exploring the causes of investors ’ irrational behavior and effective ways to reduce irrational behavior can not only contribute to behavioral finance research with individual investment behavior as the object,but also provide empirical evidence for regulators to formulate relevant supporting policies to guide investors ’ rational decision-making.For how to improve the irrational behavior of investors,the Internet speculative bubble in the early 20 th century and the Wall Street financial crisis in2008 show that information disclosure,financial product design,financial advice and so on cannot fundamentally eliminate the behavior deviation of investors.The lack of financial literacy of investors is one of the decisive factors for the outbreak and spread of the crisis.Financial literacy reflects the ability of investors to use financial knowledge and investment skills to effectively allocate financial resources and ultimately achieve lifelong financial security,covering financial knowledge and financial capabilities.Studies on household finance show that educational activities aimed at improving personal financial literacy can better guide and standardize residents’ investment behaviors,correct their wrong financial concepts and reduce behavioral deviations.Financial education refers to a series of social activities that provide individuals with basic and necessary financial knowledge,promote them to master investment skills,improve financial ability,and effectively manage financial affairs.Limited by the availability of individual investor data,the existing literature mostly uses household survey data to explore the impact of financial education on individual economic decisions such as financial market participation,savings,credit and debt,and pays less attention to the internal relationship between financial education and investors ’ irrational behaviors.Capital market also has "learning from doing" effect.Therefore,an important research on behavioral bias analysis also involves the influence of investment experience on investors’ irrational behavior.With the accumulation of investment experience,investors have the ability to learn from transactions.Investment experience is also an important factor for economic individuals to become more rational.Based on the above theoretical and practical background,this paper adopts the survey data of China Investor Financial Education Survey provided by Institute of Chinese Financial Studies of Southwestern University of Finance and Economics,and the investor transaction data provided by a large domestic brokerage.Considering the learning mechanism for investors to accumulate practical experience through financial market,this paper systematically discusses the influence of financial education on irrational investment behavior,analyzes the mechanism behind the influence from two dimensions of financial knowledge and financial ability,and puts forward policy suggestions from the perspective of national strategy,system construction and feedback mechanism of financial education.The specific research contents of this paper are as follows:First,for the irrationality of investors’ purchase decision-making stage,this study analyzes the impact of financial education and investment experience on investors’ irrational asset allocation behavior.First of all,drawing on the methods of index construction in existing research,we use the subjective input and objective acceptance of financial education to prepare the index of investor financial education.Secondly,we construct an econometric model to examine the impact of financial education and investment experience on the irrationality of stock asset allocation(single shareholding)and portfolio construction(insufficient diversification).We also discuss the heterogeneous effects of different dimensions of financial education and different time when investors begin to receive financial education,and analyze the mechanism from the channels of financial knowledge and investment skills.Moreover,this study also explores whether financial education and investment experience have different effects on investors’ asset allocation behavior in different regions of digital finance development.Finally,in order to overcome the missing variables or reverse causal problems that may exist in the model,this paper uses instrumental variable method to estimate the main regression again,and makes robustness test based on changing the irrational behavior index of asset allocation,changing the construction method of financial education index and sub-sample regression.Secondly,for the irrational behavior of investors in the trading stage,this paper empirically tests whether financial education and investment experience can reduce excessive trading of investors,and explores the irrational decision-making psychology behind frequent trading of investors.Further,we demonstrate that financial information interpretation ability and financial risk perception ability play an intermediary role in the impact of financial education and investment experience on excessive trading,and examine the heterogeneity of different individual characteristics according to investor age,education and income.In robustness test,we carried out instrumental variable regression,missing variable test,different measures of core variables and sample regression.Thirdly,for the irrational decision-making stage of investor selling,based on the data of investors ’ questionnaire and transaction behavior,this paper constructs the subjective disposition effect and objective disposition effect respectively,examines the influence of financial education and investment experience on the disposition effect,and discusses the role of financial knowledge and financial information acquisition in the analysis of transmission channels.We also make a sample regression according to investors ’ trading motivation(gambling preference and sensation seeking)and holding period,and test whether investors ’overconfidence will moderate the effect of investment experience on the disposal effect.The paper also adopts instrumental variable method,and carries out robustness test in eliminating the interference of other variables,subsample regression of asset allocation,sub-sample regression of risk tolerance,etc.Fourth,for the welfare analysis of financial education,this research takes investment returns as an example to examine the role of financial education in improving personal financial well-being.We use the intertemporal choice model with financial education investment variables to deduce the relationship between financial education and investment income,and put forward the research hypothesis.This study combines the theoretical model and empirical research to empirically test the impact of financial education and investment experience on investors ’ stock investment income and financial asset investment income.At the same time,from the perspective of asset allocation and investment strategy,this study analyzes the attribution of financial education to improve investment returns.Considering the differences in the timing of financial education and the awareness of long-term financial education among different investors,heterogeneity is also discussed.Finally,we use instrumental variable method,substitution estimation method and substitution variable construction method to conduct robustness test.The main conclusions of this paper are as follows:(1)Financial education significantly reduces investors’ irrational buying decisions.The more financial education investors have,the more diversified their portfolios are,and the less likely they are to hold stocks unitary.Financial education mainly acts on purchasing decisions by improving investors ’ financial knowledge and enhancing their basic investment skills.Investment experience has a U-shaped relationship with stock ownership simplification and an inverted Ushaped relationship with portfolio diversification.The transmission channel of investment experience is mainly the improvement of investment skills,which is manifested as the "practice makes perfect" effect.The heterogeneity analysis shows that investors who have not systematically studied financial knowledge receive financial education after entering the financial market,which will reduce the centralized holding of financial assets.In addition,in areas where the development of digital finance is absent,the effect of financial education on optimizing investor asset allocation is more obvious.(2)Improving investors’ financial education can help reduce investors’ tendency and degree of overtrading.Investment experience and over-trading are inverted U-shaped,that is,investors with some practical experience tend to overtrading after entering the market.With the continuous accumulation of investment experience,sophisticated investors will choose the appropriate transaction frequency.The psychological basis of financial education to correct irrational trading behavior is to reduce investors ’ gambling preferences and sensation seeking.The transmission channel of financial ability is to improve investors ’information interpretation ability and risk perception ability.The empirical results show that investors who enter the market and tend to over-trade are more difficult to profit in the stock market,highlighting the importance of financial education for novice investors.(3)The effect of financial education on reducing investors ’ objective disposition is also obvious.Improving financial education also improves investors’ self-perception of disposition effect.The investment experience and disposition effect are U-shaped,and the disposition effect of investors with insufficient experience and rich experience is more serious.Mechanism test results show that financial education reduces investors ’ subjective and objective disposition effects mainly by improving investors ’ financial knowledge and financial information acquisition ability,and investment experience improves disposition effects mainly through information channels.Heterogeneity studies show that financial education has more aboriginally inhibited the disposition effect of investors who do not have gambling preference or feeling seeking and have a holding period of 1 – 3months.(4)Financial education is an effective way to improve investors ’ financial well-being.Investors improve the returns on stock investment and financial asset investment through financial education,and investors with relatively rich experience are more likely to make profits.From the perspective of asset allocation behavior change,investors with higher degree of financial education improve the stock investment income and financial asset investment income by reducing the simplification of shareholding and improving the diversification of financial assets.From the perspective of investment strategy transformation,financial education will reduce investors ’ tendency to pursue,improve the possibility of investors choosing passive management strategies,and thus promote investors to obtain considerable investment returns.The main innovations of this research are as follows :(1)This research focuses on the typical irrational behavior of Chinese securities investors(based on the decision-making stage of investors,divided into purchase decision-making stage,trading stage and selling decision-making stage),and studies the effectiveness of financial education from the perspective of improving their behavior deviation.It is the first time to systematically discuss the influence mechanism of financial education on investors’ irrational behavior,which provides a new idea for the effectiveness research of financial education and enriches the literature foundation of the related research on financial education and investors’ behavior.(2)The welfare analysis of financial education reflects the innovation of research design in this paper.In the theoretical analysis,this study constructs an intertemporal choice model including financial education investment,and clarifies the micro mechanism of financial education affecting personal financial wellbeing.In empirical research,we clarify that the ultimate goal of investors ’participation in financial markets is to maximize investment returns.Compared with previous studies on the welfare analysis of financial education from the aspects of household wealth growth,wealth inequality and income mobility,this research provides direct evidence for the relationship between financial education and investment income based on the return on equity investment and return on financial assets investment.In addition,taking into account the ’ learning by doing’ effect of investors in the securities market,we control the possible impact of learning effect on investment performance,and obtain a more robust and credible research conclusion.(3)Relying on social surveys lasting several years,we innovatively uses the matching data of Financial Education questionnaires and investors’ trading accounts based on the original data set of China Investor Financial Education Survey(CIFES).In this study,an investor financial education index is prepared from the input and acceptance of investor financial education in accordance with China’s actual national conditions.CIFES(2020)matches the two types of data for the first time,which not only solves the problem of data noise using questionnaire survey alone,but also supplements information such as investor personal characteristics and financial education lacking in transaction data.This study uses the data set for micro empirical analysis to improve the explanatory power of empirical results. |
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