Research On The Influence Of Regional Legal Environment On Family Financial Market Participation

Family finance is an important part of financial research in a country,and it is also an important background of this paper.The characteristic of family asset allocation in China is that property is the main component while financial assets occupy a less important position.Even though the per capital income and wealth have increased significantly in recent years,most families still do not participate in the financial market through any way.This limited participation phenomenon has attracted many scholars’ attention.Previous studies have shown that an effective structure of allocation of family financial assets can promote the increase of family wealth,improve social welfare and consumption level,so as to promote the development economy.Therefore,there are many studies exploring the factors which influence family financial market participation in terms of internal factors such as individuals,families,or external factors such as financial development and market conditions.However,at present,no scholars have explored the influence of regional legal environment on family financial market from the perspective of law.The construction of legal environment plays an important role in today’s China,and in the study of law and finance,it has been proved that law can promote financial development by protecting investors.So,can the law promote the participation of family financial market through protecting investors? What are the ways to promote it? These problems still need to be discussed and answered.This paper attempts to study and analyze of the problems above from the perspective of China’s regional legal environment.First of all,the regional legal environment will affect the participation of family financial market.In the early study of law and finance,scholars have confirmed that law enforcement and legislation are equally important in protecting investors.Combined with the actual situation of our country,although the scope of investor protection is determined by legislation,the degree of investor protection is determined by the law enforcement environment of each region.When there are differences in the allocation of judicial power,the ability of law enforcement personnel,judicial independence and the development level of law firms and other intermediary organizations in different regions,there will be differences in the protection of investors in different regions,which will eventually lead to differences in regional financial market participation.Because in a good legal environment,investors can not only enjoy their due rights and interests,but also reduce the potential losses through the deterrent effect of law,and ultimately protect their investment income to the greatest extent.Therefore,this paper discusses the influence of regional legal environment on family financial market participation,and then expounds the mechanism:(1)regional legal environment promotes financial development,and family financial market participation has been improved.(2)The regional legal environment improves family risk preference and financial knowledge,and promotes the participation of family financial market.Secondly,following the scientific,simple,effective and implementable principles,based on the above theoretical analysis,this paper focuses on empirical research and uses quantitative analysis method.This paper uses the data of China’s ownhouse tracking survey in 2010,2012,2014 and 2016 and the index of legal environment of each province in the corresponding period to study the impact of regional legal environment on ownhouse financial market participation.The results show that: first,the regional legal environment can indeed promote family financial market participation.Second,the regional legal environment enhances family financial market participation by improving financial development.Third,the regional legal environment can also promote the degree of participation of family financial market by improving family risk preference and financial knowledge.Finally,this paper comes up with policy suggestions to promote the participation of family financial market in China.First,we should continue to strengthen the construction of the legal environment in various regions of our country and narrow the differences.Second,continue to strengthen the protection of investors,create a safe and healthy investment environment actively,and ultimately achieve the purpose of improving the allocation of ownhouse financial assets.Third,we should continue to strengthen the legal education of investors and enhance the corresponding legal awareness of investors.