Trust, Sociability and Stock Market Participation

Georgarakos, Dimitris; Pasini, Giacomo

doi:10.2139/ssrn.1397236

Cited by 65 publications

(84 citation statements)

References 51 publications

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“…Our study documents that there is wide variation in both risk attitude and trust across European countries and households. It is also this variation in risk attitude and trust that helps to explain the well‐known large cross‐country discrepancies in financial decisions that we observe in Europe (e.g., Georgarakos and Pasini, ).…”

Section: Resultsmentioning

confidence: 59%

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Can Risk‐Averse Households Make Risky Investments? The Role of Trust in Others

Bucciol

Cavasso

Zarri

2018

Scandinavian J Economics

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In this paper, using data from the Survey on Health, Ageing and Retirement in Europe (SHARE, 2006 and 2013 waves), we illustrate the link between individuals' attitudes to financial risk combined with their willingness to trust others, and their investments in risky assets. Individuals who display either risk tolerance alone or -to a lesser extent -risk aversion and trust more frequently decide to buy risky assets. The comparison between Scandinavian and Mediterranean countries indicates that trust plays qualitatively different roles depending on the prevailing combination of risk attitude and trust in the area being studied.

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Section: Resultsmentioning

confidence: 59%

“…(iii) We investigate the interaction between risk attitude and trust . Georgarakos and Pasini () show that individuals who live in a region with a higher fraction of people who trust have an increased probability of owning stocks. Pevzner et al .…”

Section: Literature Reviewmentioning

confidence: 99%

Can Risk‐Averse Households Make Risky Investments? The Role of Trust in Others

Bucciol

Cavasso

Zarri

2018

Scandinavian J Economics

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“…The difficulty faced by researchers interested in the application of culture to finance, however, is how best to approximate or measure culture. In finance, the effect of culture is predominantly studied using broad and often one-dimensional variables; primarily trust (Georgarakos and Pasini, 2011;Guiso et al, 2008) and religion (Kumar et al, 2011;Renneboog and Spaenjers, 2012). Guiso et al (2008) and Georgarakos and Pasini (2011) approximate culture using a binary variable from the World Values Survey (WVS) that classifies individuals as either generally trusting or not.…”

Section: Introductionmentioning

confidence: 99%

Individual values and household finances

2016

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We create individual cultural values measures for households and show that this is an important determinant of their financial behavior. To date, personal cultural values have only been indirectly measured through religion and trust. But these are, at best, an approximation of true cultural values. Applying a holistic framework from the World Values Survey (WVS), we create individual measures of cultural values, and show that the self-expression values of this framework are positively associated with a households' financial decisions. Examining the individual cultural values that make up the WVS model, we further show that happiness, trust, and playing an active role in society, are individually important determinants of household financial decision-making. Our study shows that cultural values can be brought from a generalized national level to the individual level in order to improve our understanding of household financial decision making.

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“…Falk et al 2016), such as stock market participation (e.g. Georgarakos and Pasini 2011;Guiso et al 2008). In the context of SRI, Nilsson (2008) as well as Wins and Zwergel (2016) examine the influence of individuals' trust related to SRI based on survey data.…”

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confidence: 99%

Investment Barriers and Labeling Schemes for Socially Responsible Investments

Gutsche

Zwergel

2020

Schmalenbach Bus Rev

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Given the increasing role of socially responsible investing (SRI), but still limited participation of individual (i.e. small, retail) investors, the objective of this study is twofold: (i) We aim to identify investment barriers regarding SRI for individual investors and analyze to what extent these barriers vary across different investor groups. (ii) We analyze to what extent sustainability or transparency labels can help to overcome these barriers. To this end, we empirically analyze data from a survey and a stated choice experiment for a broad sample of financial decision makers in German households. The results suggest that a considerable amount of respondents can imagine to invest in a socially responsible manner, which is promising for policymakers and practitioners who aim to foster sustainable development and SRI. However, too high information costs are a severe barrier for potential future investors and a considerable share of respondents distrusts providers of socially responsible investment products. Banks, who could help to solve this problem, appear not to fulfill their role as intermediaries. But we find that labels might serve as a complement to banks. Especially sustainability certificates that confirm the consideration of sustainability criteria could decrease information costs and overcome at least some barriers for some investor groups, particularly for new investors. However, the results also suggest that a certain degree of basic knowledge and trust in providers of socially responsible investment products is required before labels work efficiently.

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Trust, Sociability and Stock Market Participation

Cited by 65 publications

References 51 publications

Can Risk‐Averse Households Make Risky Investments? The Role of Trust in Others

Can Risk‐Averse Households Make Risky Investments? The Role of Trust in Others

Individual values and household finances

Investment Barriers and Labeling Schemes for Socially Responsible Investments

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