Abstract
The financial industry plays a significant role in Mainland Chinese and Hong Kong economies and has aroused increasing managerial and academic interests in recent decades. Individual investors are becoming more cautious towards financial investment which makes it difficult for financial service providers to formulate marketing strategies after experiencing several financial crises. Prior research has suggested that financial investment behaviour would be affected by various factors, including the demographic characteristics of individuals; however, they seldom study the differences in financial investment behaviour between Mainland Chinese and Hong Kong investors or provide an easy-to-use approach for practical usage. This exploratory study aims at filling the identified research gap by proposing linear regression models of the financial investment behaviour of Mainland Chinese and Hong Kong investors. Based on the results of regression analyses, (i) there exist significant differences in financial investment behaviour between Mainland Chinese and Hong Kong investors, and (ii) investors’ psychological, sociological and demographic factors are significant predictors of their investment behaviour/preferences. Thus, financial service providers are able to predict the investment behaviour/preference of its customers and formulate marketing and strategic decisions, such as customizing the financial investment portfolio of customers on the basis of regression models built.
Highlights
As an international financial centre, Hong Kong offers a variety of financial products, such as mutual funds, stocks and bonds, for individual investors to invest
Due to the close proximity, low tax rate, similarities of language and culture and global access, Hong Kong remains the top offshore investment destination for Mainland Chinese investors.[1]. These facts encourage the financial industry in Hong Kong to review marketing strategies for targeting this fastgrowing market segment, that is, Mainland Chinese investors investing in the offshore Hong Kong market
With the help of the 142,496 observation samples, regression analyses are conducted to assess the relationships between the key attributes identified and the investment behaviour/preferences between Mainland Chinese and Hong Kong investors
Summary
As an international financial centre, Hong Kong offers a variety of financial products, such as mutual funds, stocks and bonds, for individual investors to invest. A review of the existing literature demonstrated that researchers focus mainly on identifying factors influencing investor behaviour and/or examining their impact on investment decisions.[10,11,12] Studies seldom investigated how to predict investors’ preference based on the factors influencing their behaviour. This gap is probably due to researchers lacking access to the huge volumes of strictly confidential financial transaction data required to draw such conclusions from studying real behaviour. How do the major attributes identified predict investors’ behaviour/preferences in Hong Kong and Mainland China?
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