Cultural Differences in Information Obtainment for Financial Decisions-East versus West

Abstract

This studv examines how individual investors from different cultural backgrounds perceive different media and various sources of information. More specifically, this study focuses on comparing (a) the effectiveness of different media on individual investors' investment decisions, (b) the degree of an investor's reliance on various sources of investment information/knowledge, (c) the source credibility of investment brokers, and (d) the impact of major source characteristics on the information persuasiveness between American investors and their Eastern Asian counterparts. Two samples totaling 180 individual investors were interviewed. One sample group consisted of 120 American investors and the other consisted of 60 Asian investors. Respondents were first asked to identify the most effective media for their investment decisions among seven major types of media. They were then asked to evaluate the importance of eight major sources of investment information or knowledge on a set of five-point itemized rating scales. In addition, a question was devoted to determine how much people trust investment brokers' advice (i.e., source credibility). A seven-point rating scale was used for this measurement. Finally, investors were asked to indicate the perceived impact of major source characteristics on the persuasiveness of inveshnent information. The findings from this study clearly indicate that while there are similarities, there are also many differences between American and Asian investors in how they perceive the impact of media and information sources on individual investment decisions. These differences may be a direct reflection of culaual differences between the two groups of investors. It may also be a result of the differences in the practices of the financial markets and financial institutions.