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Information Sharing and Stock Market Participation: Evidence from Extended Families

27 Pages Posted: 15 Mar 2010  

Geng Li

Federal Reserve Board

Multiple version iconThere are 2 versions of this paper

Date Written: September 1, 2009

Abstract

Using the Panel Study of Income Dynamics, we document that, controlling for observable characteristics, household investors' likelihood of entering the stock market within the next five years is about 30 percent higher if their parents or children had entered the stock market during the previous five years. By eliminating competing hypotheses such as preference similarity and herding, we argue that these findings highlight the significance of information sharing regarding household financial decisions.

Keywords: Information sharing, Stock market participation, Extended families

JEL Classification: D14, D83, G11

Suggested Citation

Li, Geng, Information Sharing and Stock Market Participation: Evidence from Extended Families (September 1, 2009). Available at SSRN: https://ssrn.com/abstract=1569172 or http://dx.doi.org/10.2139/ssrn.1569172

Geng Li (Contact Author)

Federal Reserve Board ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

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