Gender Differences in Stock Market Participation: Evidence From Chinese Households

Abstract

Using micro household survey data from China, this study finds that women are less likely to participate in the stock market than men. This gender pattern in market participation rates holds when we control for household features, characteristics of both spouses, and their interactions and relative decision-making power. We also show that the gender difference in stock market participation operates through investors’ behavioral factors, particularly their risk preference. Moreover, we confirm the influence of cultural gender norms among older households. The gender difference in stock market participation is reduced where women’s influence over the decision of stock investments is likely constrained by a male-biased social norm. The study’s findings suggest the crucial role of gender and gender-related cultural norms in shaping household financial decisions in the presence of gender inequality, such as in China. It extends our understanding of the interrelations between financial decisions and social and behavioral dimensions in a developing context.

Keywords: household finance, gender gap, risky assets, social norm

JEL Classification: D14, G11, J16