Research On The Impact Of Family Social Network On Financial Market Participation

As an important part of the microeconomic main body,the family’s financial investment decision-making behavior has attracted more and more scholars’ research and attention.Family finance has risen and become another emerging enterprise after the traditional western asset pricing and corporate finance.The field of finance research.With the continuous development of China’s financial market and the further improvement of household disposable income,residents’ investment awareness and financial management concepts have also been strengthened,but the data show that assets with less risk,such as savings deposits,still occupy an absolute proportion in China’s household assets,Other financial assets such as stocks,bonds,funds,and insurance account for a small proportion or even some households are not.Active participation of the family in the financial market can guide families to allocate family assets rationally,realize the preservation and appreciation of family assets,and improve the overall welfare of the family;it is also conducive to the development of China’s financial market and contribute to deepening financial market reform.There are many factors influencing residents’ participation in the financial market.Most scholars conduct research on the characteristics of individual heterogeneity of investors,ignoring the influence of the social network in which investors are located.Based on China’s national conditions,this paper studies the impact of social networks widely existing in Chinese families on financial market participation.Based on the relevant theories of social networks,this paper analyzes the theoretical influence mechanism of family social networks on financial market participation,and concludes that family social networks mainly affect family participation in financial markets through information sharing mechanism,trust and demonstration mechanism,financing and implicit guarantee mechanism,and based on the 2013 China Household Finance Survey Data(CHFS),the principal component analysis was used to construct the family social network as proxy variable,and the Probit and Tobit models are used to empirically study the possibility of family social network participation in finance markets.And the impact of participation.Empirical results show that family social network significantly promotes family participation in financial markets and participation.In order to test the robustness of the results and overcome the influence of the endogenous nature of the family social network on the estimated results,the standardization of the gift income and expenditure is tested for robustness,and the social status of the parents is selected as the instrumental variable for verification.Supported the above conclusions.Finally,from the perspective of social networks and financial institutions,this paper puts forward some countermeasures and suggestions for promoting the participation of Chinese families in the financial market.The family should pay attention to the investment and maintenance of the existing social network and broaden the scale of the network;financial institutions should focus on the development and utilization of the family when developing business,Social network channels,innovative marketing methods,and the relevant regulatory agencies should encourage financial institutions to innovate product service,and expand family investment channels,thereby increasing the financial market participation rate of Chinese households and better configuring household assets.