Lets talk about #StockMarket participation & #SocialInteraction...
Here is a question: If you go to church with, or you are a neighbour to someone that participates in the #StockMarket, do you think being in their company can lead to you (given you aren't a retail investor) participating in the stock market?
I am currently engaged in a #Research wherein I explore the reasons why and the reasons why not retail investors participate in the #StockMarket. I am also looking at the reasons why a private company would choose to go public & list its shares on a stock exchange...
Assume that you are confronted with a
illiquid or inactive #stockmarket. What would entice private companies to list & what would encourage retail #investors to buy shares on the exchange?
illiquid or inactive #stockmarket. What would entice private companies to list & what would encourage retail #investors to buy shares on the exchange?
The #Hypothesis I am exploring in this case is that: social households, that is, those that interact with neighbours, or attend church are more likely to invest in stock markets than non-social households. This is a sort of "peer-effect" story I am trying to explore...
Essentially, I assume that there are multiple equilibrium in existence. That is, if there is low participation in the #StockMarket (low equilibrium), I hypothesis that with the right kind of "coordination mechanism" we can (using Pareto theory) attain a higher equilibrium...
Simply put, what I am trying to unearth is, will a household invest in stocks because its neighbour or church fellow participates in the stock market? What are the chances that this will happen? I am exploring a kind of #Social #Multiplier, a positive externalise if you will...
I align myself with large body of work in #Sociology that posits that using questions such as "of your closest neighbours, how many do you know", you can determine the extent of interactions between neighbours and thus what information they can obtain through such interactions...
For e.g. a closer-knit community with more interaction between neighbours can lead to (inter alia) more information sharing (e.g new jobs info through informal connections, as opposed to formal ones). I take this approach in assessing likelihood of #stockmarket participation...
In closing: I will look to use a household budget survey to harvest #microdata and use specific indicators & control variables to most likely fit a #binary response model. The work is still in the very early stages & I am #Thinking out loud 😎
@threadreaderapp Kindly unroll...
