Is Financial Literacy Associated with Investment in Financial Markets in the United States?
| Autor: | Naheed Rabbani, Yoshihiko Kadoya, Mostafa Saidur Rahim Khan |
|---|---|
| Rok vydání: | 2020 |
| Předmět: |
lcsh:TJ807-830
Geography Planning and Development lcsh:Renewable energy sources Financial system 010501 environmental sciences Management Monitoring Policy and Law 01 natural sciences financial literacy 0502 economics and business financial markets 050207 economics Robustness (economics) lcsh:Environmental sciences 0105 earth and related environmental sciences lcsh:GE1-350 Renewable Energy Sustainability and the Environment lcsh:Environmental effects of industries and plants Bond 05 social sciences Financial market Investment (macroeconomics) United States Keywords: financial literacy Capital formation risky securities household investment lcsh:TD194-195 Currency Financial literacy Business Futures contract |
| Zdroj: | Sustainability Volume 12 Issue 18 Sustainability, Vol 12, Iss 7370, p 7370 (2020) |
| ISSN: | 2071-1050 |
| DOI: | 10.3390/su12187370 |
| Popis: | Lack of investment in financial markets is one of the enduring puzzles in empirical finance. Although recent studies ascribe the lack of investment in stocks to financial literacy, the association between financial literacy and investment in financial markets remains inconclusive. We examine whether financial literacy is associated with investment in financial markets in the United States. We use investment in stocks, futures/options, investment trusts, corporate bonds, foreign currency deposits, and government bonds of foreign currency as a proxy for investment in financial markets. Using data from the Preference Parameter Study, a nationwide panel survey conducted by Osaka University of Japan, we provide evidence that financial literacy has a significantly positive association with investment in financial markets even after controlling for demographic, socioeconomic, and psychological factors. We check the robustness of our results by using an alternative proxy for investment in financial markets. Our study has far-reaching policy implications and we conclude by suggesting the introduction of financial literacy programs into the academic curriculum. Improving financial literacy could positively impact the mobilization of household funds and contribute to capital formation. |
| Databáze: | OpenAIRE |
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