The Impact Of Cultural Diversity On China’s Family Financial Asset Allocation

In 2006,Campbell pointed out that family finance is independent of asset pricing and corporate finance has become an important research branch of finance.Its prospects are very broad,and family finance is receiving more and more attention from scholars.Research perspectives and research methods are emerging one after another.Summarizing the existing literature,the analysis of the factors affecting the allocation of family financial assets mainly from family special evidence(age,gender,family size,marital status,education level,family wealth,etc.),background risk factors(labor income risk,real estate investment income risk,industrial investment income risk,health risk,etc.),behavioral participation factors(cognitive ability,financial knowledge,financial availability,risk appetite,participation inertia,etc.)and social characteristics(social interaction,social capital,social security,taxation,system,trust,etc.).This paper focuses on the relationship between culture and family economy,focusing on variables such as cultural diversity and the proportion of household financial assets.Since the report of the 18th National Congress of the Communist Party of China,"cultural self-confidence" has.become a hot word,and the Chinese government has increasingly valued the importance of culture.In 2011,China proposed the strategy of "cultural power";in 2012,Xi Jinping proposed to attach great importance to cultural self-confidence and promote the prosperity of socialist culture.China has repeatedly emphasized the improvement of national cultural soft power through cultural self-confidence construction,the enhancement of the international influence of the Chinese traditional culture,the further release of cultural productivity through innovation and creation,and the realization of national rejuvenation and the great construction of a socialist cultural power.The relationship between culture and economic development is getting closer and closer,and the two interact and benefit each other.China has a vast territory,diverse ethnic languages,and rich and varied cultural characteristics.It is an ideal place to study cultural diversity.Based on the above background,this paper uses the China Household Financial Survey(C.HFS)and the China Family Comprehensive Survey(CGSS)to conduct empirical analysis to examine the impact of cultural diversity on the choice of Chinese household financial assets,and at the same time for China’s capital market.Provide advice on reform,financial institutions designing financial products to provide services,and promoting the rational allocation of family financial assets.In this paper,according to the Chinese Social Survey(CGSS)and Desmet et al.(2017)used the social conflict model to construct a cultural heterogeneity index to construct a cultural measure Div to measure cultural differences among provinces,autonomous regions and municipalities.Secondly,with the Chinese Family Finance Survey(CHFS)of more than 8,000 households in 2011 and more than 28,000 households in 2013 as the research samples,further analyze the impact of cultural diversity on the choice of household financial assets in China;mainly choose the proportion of financial assets.The variables are interpreted to study the breadth of investment in financial assets and the depth of investment.Third,considering the influence of climatic conditions,geographical factors,history and culture,etc.,the differences in lifestyle,customs,behavioral norms,beliefs,etc.between the eastern and western regions,north and south,and urban and rural areas in China are obvious,and regional cultural differences are obvious.In addition,China is a country with diverse religious beliefs.The beliefs,thoughts,and behaviors embodied in different religious beliefs are completely different,enriching China’s cultural resources.The differences in the way of thinking,moral standards and values represented by culture will have different effects on the allocation of financial assets of different groups.Therefore,cultural differences between the eastern,central and western regions,north and south,between urban and rural areas,and between religious beliefs test.Therefore,in the eastern,central and western regions,between the north and the south,between urban and rural areas,there is a sample test for religious trust.Further analysis,the main mechanism of cultural diversity on the participation of family financial assets and the allocation of family financial assets is the cultural trust effect.Due to the popularization of Putonghua and the promotion of the nine-year compulsory education policy,people can basically use Mandarin to communicate without obvious Communication barriers,cultural exchange effects are significantly reduced,and the cultural values,identities and linguistic identity represented by cultural diversity and the formation of social capital are the deep-seated factors affecting the financial assets of households.The higher the cultural heterogeneity,the lower the degree of trust between economic individuals,and it is more likely to cause speculation,differences and psychological distance.The increase of distrust and uncertainty will reduce residents’preference for financial assets and risk tolerance,and delay investors’ investment decisions.The enthusiasm of financial markets ultimately affects financial asset investment.Finally,considering the two-way influence between culture and residents’ financial asset selection,inter-ethnic marriage rates and topographical fluctuations are introduced as instrumental variables to discuss endogenous problems.The main conclusions of this paper are that:cultural diversity has a significant negative correlation with residents’ financial market participation and financial asset investment.Family characteristics such as age,gender,education level and family wealth also have a correlation with the financial assets allocation of residents.The impact on the asset allocation of residents of different ages presents a "U" effect with a life cycle effect.Second,the level of economic and financial development in the region is positively affecting investment in family financial assets.Further analysis found that cultural diversity has obvious regional cultural differences and differences in religious beliefs.In the western region,cultural diversity has a greater impact on household asset selection than in the eastern region;in the southern region,cultural diversity has a greater impact on household financial asset selection than in the northern region;in rural areas,cultural diversity affects household financial assets.The marginal influence of choice is also higher than that of urban households;the cultural differences of non-religious residents have a greater negative impact on residents’ financial asset allocation than those with religious beliefs.In religious groups,culture exerts a positive marginal effect.In short,in areas with greater cultural differences,the negative impact of cultural diversity on family financial asset selection is more pronounced.