Does financial education help to improve the return on stock investment? Evidence from China

Zhang, Yong; Lu, Xiaomeng; Xiao, Jing Jian

doi:10.1016/j.pacfin.2023.101940

Cited by 12 publications

(19 citation statements)

References 23 publications

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“…The dependent variable of interest in this study is household stock profit level. Most existing studies use the income from stock sales minus the input from stock buying to measure stock profit and loss [ 28 , 33 ]. However, the fluctuation of stock book prices does not represent the return generated from actual trading.…”

Section: Methodsmentioning

confidence: 99%

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Impact of financial literacy on household stock profit level in China

Luo,

Azam,

Wang

2023

PLoS ONE

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The popularization of financial literacy has become a global trend, with governments across the world expressing commitment to continuously enhancing the financial literacy of their citizens to improve the country’s overall financial well-being. However, there is a lack of research evaluating the actual effects of financial literacy on Chinese households. This study first investigated the micro impact of financial literacy on the household stock profit level using data from the 2019 China Household Finance Survey. As most existing studies use factor analysis to measure financial literacy from a single dimension of financial knowledge, our study additionally used the entropy method to construct a composite evaluation system of financial literacy from four dimensions: financial skills, knowledge, attitudes, and behaviors. The ordinary least squares model was utilized as the primary regression model to estimate the correlation, and the average financial literacy of other households in the same community was selected as an instrumental variable. Further instrumental variable regression analysis was conducted using the two-stage least squares method. Three robustness tests were performed to ensure the reliability of the research findings. The results demonstrate that financial literacy significantly enhances household stock profit levels. The mediation effect analysis indicates that financial literacy affects stock profit levels through financial information attention. Moreover, financial literacy has a more substantial promoting effect on stock profit levels for households with members working for state-owned enterprises and those living in first-tier cities. This study confirms the value of financial literacy; identifies important channels for residents to increase their property income; and provides important guidance for the government, educational organizations, and financial institutions. This also injects more vigor into market participation to improve the persistently sluggish Chinese stock market.

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Section: Methodsmentioning

confidence: 99%

“…Our research adapts control variables proposed by previous studies [ 28 , 33 ] and mediation variables suggested by [ 26 ]. For measurement purposes, data for each household are normalized.…”

Section: Methodsmentioning

confidence: 99%

Impact of financial literacy on household stock profit level in China

Luo,

Azam,

Wang

2023

PLoS ONE

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“…Theory of planned behavior 8 10 (Adil et al, 2022a(Adil et al, , 2022bAdil et al, 2023;Indapurkar & Raj, 2017;Mudzingiri et al, 2018;Omakhanlen et al, 2021;Robb, 2011;Yong et al, 2018) Life-cycle theory of consumption and savings 3 4 (Adam et al, 2017;Landerretche & Martínez, 2013;Xiao & Porto, 2017) Prospect theory 5 6 (Adam et al, 2017;Jonsson et al, 2017;Rasool & Ullah, 2020) Behavioral finance theory 3 4 (Khandelwal et al, 2022;Youssef et al, 2021;Zhang et al, 2023) Modern portfolio theory 4 5 (Markowitz, 1999;Mouna & Anis, 2017;Murendo & Mutsonziwa, 2017;Rasool & Ullah, 2020) Economic theory 4 5 (Gaudecker, 2015;Grohmann, 2018;Wagner & Walstad, 2019) Efficient market/capital market theory 3 4 (Adil et al, 2022a(Adil et al, , 2022bAdil et al, 2023;Rasool & Ullah, 2020) Other theories 8 10 ( Awais et al, 2016;Kim et al, 2019;Mireku et al, 2023;Shih & Ke, 2014) No guiding theory 41 52 financial education has a positive impact on financial knowledge, which, in turn, significantly predicts both financial attitude and behavior. Omakhanlen et al (2021) have utilized the Planned Behavior Theory (PBT) as a theoretical framework to measure spending behavior, employing the respondents' preparation of budgets and personal preretirement savings accounts as proxies.…”

Section: Theory No Of Articles % Exemplary Studiesmentioning

confidence: 99%

“…The reported relative frequencies relate the absolute number of studies that feature a given industry or country to the total number of individual studies (not articles). Malik, 2023; Kim et al, 2019;Youssef et al, 2021) Banking Sector (Andreou & Anyfantaki, 2021;Khandelwal et al, 2022;Robb, 2011) and Investment Sectors (Adil et al, 2022a(Adil et al, , 2022bHüsser, 2015;Legenzova & Leckė, 2024;Zhang et al, 2023). This emphasis is largely due to the substantial number of studies centered around these domains.…”

Section: Context (C)mentioning

confidence: 99%

Impact of financial literacy on consumer financial behavior: A systematic review and research agenda using TCCM framework

Negi,

Jaiswal

2024

Int J Consumer Studies

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The primary objective of this study is to investigate the impact of financial literacy on consumer financial behavior through a systematic literature review. While numerous studies have explored this association, there is a lack of a comprehensive analysis that consolidates diverse insights and offers a holistic view. Our study addresses research questions, including the utilization of theoretical frameworks explaining the impact of financial literacy on consumer financial behavior. Also, we explore the diverse contexts encompassing industries, countries, and consumer types, involved in this relationship. We scrutinize the dependent, independent, control, mediating, and moderating variables involved, along with the methodological approaches utilized for assessing the impact. Employing the Theory, Context, Characteristics, and Methodology (TCCM) framework, we systematically analyzed 79 identified papers using the Scientific Procedures and Rationales for Systematic Literature Reviews (SPAR‐4‐SLR) protocol. The findings highlight the multifaceted factors shaping individuals' financial decisions and behaviors, shedding light on the complex dynamics prevalent across industries, countries, and consumer segments. Our review offers insights into future research directions, advocating the integration of fresh theories and innovative methodologies to enhance existing knowledge. This study significantly contributes to academic understanding and offers valuable guidance for policymakers, businesses, and educators seeking to enhance financial literacy education and shape positive consumer financial behaviors.

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“…On the other hand, some companies have adopted a proactive approach in providing comprehensive financial education to their employees. They provide programs that are structured, sustainable, and relevant to employees' needs (Zhang et al, 2023). Such an approach not only improves employees' financial knowledge but also contributes positively to a corporate culture that cares about employees' overall well-being .…”

Section: Introductionmentioning

confidence: 99%

Financial Literacy-based HRM: Optimizing Human Resource Performance Through Financial Education

Rostini,

Siti Mariam,

Yana Ameliana

2023

ATESTASI

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The purpose of this study is to analyze the causality of the relationship between Financial Education, Availability of Human Resources for Financial Education, Financial Knowledge, Adoption of Financial Behavior, HR Performance, Employee Financial Productivity, Corporate Financial Welbeing. This study uses a quantitative approach which is then processed using smartpls as an analysis tool. The data collection method used an online questionnaire addressed to 268 respondents. The results of this study state that overall, this research illuminates the importance of individual financial behavior in an organizational context. By highlighting Adoption of Financial Behavior as the focal point, this study shows that individual financial behavior has a significant impact on the company's financial well-being, employee productivity, and overall human resource performance. Managerial implications affirm the need for greater investment in financial education in the workplace to shape positive financial behaviors and support the financial well-being of the firm. Meanwhile, the theoretical implications reinforce the conceptual basis of the role of financial education in shaping prudent financial behavior in an organizational context. With an emphasis on financial education and a better understanding of individual financial behaviors, management can strengthen the financial foundation of the firm, increase employee productivity, and improve overall human resource performance, forming a crucial step towards sustainable financial well-being for the organization.

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Does financial education help to improve the return on stock investment? Evidence from China

Cited by 12 publications

References 23 publications

Impact of financial literacy on household stock profit level in China

Impact of financial literacy on household stock profit level in China

Impact of financial literacy on consumer financial behavior: A systematic review and research agenda using TCCM framework

Financial Literacy-based HRM: Optimizing Human Resource Performance Through Financial Education

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