Financial Literacy and Risky Asset Holdings: Evidence from China

33 Pages Posted: 27 Mar 2018

See all articles by Li Liao

Li Liao

Tsinghua University - PBC School of Finance

Jing Jian Xiao

University of Rhode Island

Weiqiang Zhang

Tsinghua University - School of Economics & Management

Congyi Zhou

New York University

Date Written: December 2017

Abstract

Although financial literacy is important for participating in financial markets, the level of financial literacy of Chinese consumers is low compared with those in developed countries. Using data from the 2014 China Survey of Consumer Finances, we examine the relation between financial literacy and the risky asset holding behaviour of Chinese households, in the context of an emerging financial market with a distinct institutional background. The findings reveal that consumers with higher levels of financial literacy are more likely to hold risky financial assets than those with lower levels. The potential impacts are derived mainly from advanced financial literacy.

Keywords: Chinese households, Financial literacy, Risky asset holdings

Suggested Citation

Liao, Li and Xiao, Jing Jian and zhang, Weiqiang and Zhou, Congyi, Financial Literacy and Risky Asset Holdings: Evidence from China (December 2017). Accounting & Finance, Vol. 57, Issue 5, pp. 1383-1415, 2017, Available at SSRN: https://ssrn.com/abstract=3150038 or http://dx.doi.org/10.1111/acfi.12329

Li Liao (Contact Author)

Tsinghua University - PBC School of Finance ( email )

No. 43, Chengdu Road
Haidian District
Beijing 100083
China

Jing Jian Xiao

University of Rhode Island ( email )

Transition Center
Kingston, RI 02881
United States
401-874-2547 (Phone)
401-874-4020 (Fax)

HOME PAGE: http://www.uri.edu/hss/hdf/faculty/JingJXiao.htm

Weiqiang Zhang

Tsinghua University - School of Economics & Management ( email )

Beijing, 100084
China

Congyi Zhou

New York University ( email )

19 West 4th Street - 2nd floor
New York, NY 10012
United States
2129988500 (Phone)

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