The Influence Of Social Network On The Choice Of Household Financial Assets In China

In recent years,more and more attention has been paid to household finance.The choice of household financial assets,the degree of household financial market participation and its influencing factors are the core issues in the research of household finance.The research results show that,despite the existence of high stock premium,the participation rate of household financial market in China is significantly lower than the theoretical level,and the phenomenon of "limited participation" exists in the risk market represented by the stock market.By combing the relevant literature at home and abroad,I find that the choice of financial assets is not only related to the heterogeneity of households,but also the informal institutional factors will affect the investment decisions of households.Especially for a traditional "relationship society"such as China,the social network with kinship as the core plays an important role in people’s daily economic life,thus affecting the family’s investment decision.Based on this,this paper takes the "limited participation" of household risk market as the research background,through the combination of theoretical analysis and empirical analysis,deeply studies the influence of social network on the choice of household financial assets.Firstly,this paper combs the relevant literature at home and abroad.Based on the research background of "limited participation" of financial market and the reality of our country,this paper puts forward the following hypotheses:social network has positive influence on the choice of household financial assets.Secondly,the theory of social network and family financial asset selection is summarized,and the mechanism of social network influencing family financial asset selection is analyzed from three aspects:risk preference,information cost and financing channel.Thirdly,combined with the reality of our country,this paper makes a general analysis of the current situation of family social network and financial asset selection.Then,the influence of social network on the choice of household financial assets is investigated empirically by establishing probit and tobit models based on the microcosmic data of China Household tracking Survey(CFPS)in 2014.The empirical results show that:first,social networks have a significant positive impact on the possibility of household financial market participation in China.The regression results of regional samples also show that social networks play a significant role in promoting the participation of household financial markets.Second,social network is positively related to the proportion of household financial assets investment in China.Thirdly,in addition to social network variables,this paper investigates the influence of other characteristic variables on household financial asset selection.In particular,family net income,years of schooling,home ownership and pension insurance increase the likelihood that families will participate in the risk market.The effect of age on the participation of households in the risk financial market shows a trend of "inverted U-shape".After selecting other proxy variables,the results of this paper are still robust.Finally,based on the conclusions of the study,this paper puts forward the following policy recommendations:to strengthen the construction of harmonious communities and give full play to the positive role of social networks;to improve the income redistribution system and improve the income level of households;to improve the social security system and enhance the ability to guard against risks;to strengthen investor education and enrich the knowledge of family financial investment;to standardize the development of financial markets and deepen the reform of financial markets.