Stock Market Participation Research Articles

Comparative Analysis of Support Vector Regression and Linear Regression Models to Predict Apple Inc. Share Prices

Stock price prediction is a complex and important challenge for stock market participants. The difficulty of predicting stock prices is a major problem that requires an approach method in obtaining stock price predictions. This research proposes using machine learning with the Support Vector Regression (SVR) model and linear regression for stock price prediction—the dataset used in the daily Apple Inc historical data from 2018 to 2023. The hyperparameter tuning technique uses the Grid Search method with a value of k = 5, which will be tested on the SVR and Linear Regression methods to get the best prediction model based on the number of cost, epsilon, kernel, and intercept fit parameters. The test results show that the linear regression model with all hyperparameters k = 5 with the average taken performs best with a True intercept fit value. The resulting model can get an excellent error value, namely the RMSE value of 0.931231 and MSE of 0.879372. This finding confirms that the linear regression model in this configuration is a good choice for predicting stock prices.

Peer Effects in Stock Market Participation: Evidence from Immigration

This paper studies how peers' financial behavior affects individuals' own investment choices. To identify the peer effect, we exploit the composition of the Luxembourg population and use the differences in stock market participation across various immigrant groups to study the effect on stock market participation of natives. We find that stock market participation of immigrant peers has a sizable effect on that of natives and that social learning is one of the channels through which this peer effect occurs. However, social learning alone does not account for the entire effect. Social utility might, therefore, also play an important role in peer effect transmission.

CSR disclosure and investor social preferences: heterogenous investor responses to media reports on corporate greenwashing

PurposeThere is emerging evidence in the accounting literature that investors react negatively to corporate greenwashing. But does that hold for all investors, or do different types of investors react differently? This paper aims to study retail investors’ responses to media reports on corporate greenwashing and how these responses depend upon the investors’ social value orientation. The authors argue that media reporting on corporate greenwashing negatively affects the rationale for allocating funds to firms engaging in greenwashing. The authors also expect this reaction to be stronger for prosocial investors compared to proself investors.Design/methodology/approachThe authors conduct an online experiment with 229 participants representing retail investors in the German-speaking countries.FindingsThe results show that retail investors who received media reports on deceptive disclosure invest more funds in the company that does not engage in greenwashing (and less in the firm that engages in greenwashing) than investors who did not receive these reports. The authors’ results provide novel evidence that this effect primarily holds for investors with a prosocial value orientation. Finally, the authors’ data show that lower trust in the firm that engages in greenwashing partially mediates the effect of media reports on investor choices.Originality/valueThe authors provide unique evidence how different types of investors react to media reports on greenwashing. The authors find that moral motives, rather than risk-return considerations, drive investor responses to greenwashing. Overall, these findings support the important function of the media as an intermediary in stock market participation and highlight the pivotal role of individual traits in investors’ responses to greenwashing.

Institutional Quality, Trust, and Stock Market Participation: Learning to Forget

In this paper, we explore the relations among institutional quality, households’ level of trust, and stock market participation. We find that institutional quality has a significant impact on both trust and participation. The individual level of trust significantly affects participation, but trust plays a small role in the effect of institutional quality on participation. Further, we demonstrate that immigrants are affected by the institutional quality of both their country of residence and their home country, and that education emerges as an important learning factor in immigrants’ adaptation to new institutional environments.

Investors in the Bangladeshi stock market: issues, behavioural biases and circumvention strategies

PurposeThis study aims to explore the underlying issues of behavioural biases in relation to stock market participation and the challenges of individual investors in Bangladesh. The study identifies behavioural biases affecting individuals’ stock market participation, their circumvention strategies and the importance of financial knowledge in encouraging the participation of individuals in the stock market.Design/methodology/approachSemi-structured interviews were used in this study to gather information from industry researchers, individual investors, brokers and institutional advisors. Twenty-two experts were contacted, and 13 agreed to participate in the interviews. The study then uses the thematic analysis method to report its findings.FindingsThis research shows that investors’ behavioural biases (such as loss aversion, herding, trust, gambler’s fallacy and risk tolerance) are among Bangladesh’s primary drivers of stock market participation. Circumvention strategies (such as poor corporate governance and agency costs) also play a part in individuals’ participation. These influences are in addition to the obvious factors of investment risks, poor infrastructure, poor regulation enforcement and the need for more sufficient investment products.Research limitations/implicationsThis study conducted 13 interviews with expert subjects, which is a small sample size. However, the findings achieved saturation and cannot be ignored. Future research should use quantitative or experimental methods with a large sample size to validate the current findings.Originality/valueThis study is pioneering in the Bangladesh stock market, exploring the behavioural biases of investors’ participation in the market. This paper provides valuable insights into investor participation by discovering the underlying behavioural biases that have been continually ignored; these insights may also be relevant in frontier markets in Asian countries.

Dual Class Stock Companies: Global Experience and Russian Practice

Companies with complex equity structures formed by issuing shares of different types are a common phenomenon in developed and developing economies, including Russia. However, the causes and consequences of companies choosing such equity structures are not well understood. In particular, neither theory nor empirical studies give a clear answer to the question of the impact of such equity structures on companies' behavior and performance. This article has two goals: first, to characterize the segment of Russian public companies with dual-class stock, including the question of their genesis, and second, to assess the impact of complex equity structures on company performance. The empirical analysis draws on a database of all Russian public companies whose shares were traded on the Moscow Exchange in 2011-20. Using the tools of descriptive, statistical and econometric analysis, we show that the share of dual-class stock companies on the Russian stock market has been high and stable over time, that the overwhelming majority of such companies were created during the processes of privatization and/or reorganization of industries, and that they are characterized by a significant concentration of ownership and control rights in the hands of the largest shareholder. We find that the issue of dual-class stock does not lead to a decline in company performance. However, company performance is inversely related to the wedge between the control and ownership rights of the largest shareholder. Specifically, it is a decreasing function of the shareholder's control rights and an increasing function of her ownership rights, with almost identical absolute values of these effects. The academic significance of this study stems from the confirmation of a negative effect of the control-ownership wedge on company performance in a quasi-experimental setting of the Russian economy, where the majority of dual-class stock companies emerged as a result of government decisions on privatization/reorganization of industries. The results can be used by stock market participants and regulators, which highlights the practical value of this study.

Gender Socialization and Stock Market Participation

Gender Socialization and Stock Market Participation

Financial Literacy, Stock Market Participation, and Financial Well-Being in Germany

Financial Literacy, Stock Market Participation, and Financial Well-Being in Germany

Risks of household`s stock market participation rush after the monetary policy shifts in turkey

Risks of household`s stock market participation rush after the monetary policy shifts in turkey

Endogenous Stock Market Participation and Wealth Accumulation: A Life-Cycle Model Perspective

Endogenous Stock Market Participation and Wealth Accumulation: A Life-Cycle Model Perspective

Investor intentions of stock market participation in India: an extended TPB model

Investor intentions of stock market participation in India: an extended TPB model

Household Stock Market Participation, Local Banks, and Local Economic Development

Household Stock Market Participation, Local Banks, and Local Economic Development

Assessment of the impact of big data analysis on decision-making in stock trading processes

This paper aims to construct a trader model tailored to offer individualized investment strategies for users engaged in the US stock market. The approach taken involves two key aspects: forecasting stock prices and discerning users' personality traits to formulate optimal trading recommendations. The framework is realized through the integration of neural networks and the Moving Averages algorithm. This combined approach allows forecasting upcoming changes in stock prices and generating appropriate trading signals. Complementing this, a user risk assessment is administered, and its outcomes are leveraged to furnish personalized trading advice, offering invaluable support for informed decision-making amid intricate real-time scenarios. By synergizing predictive modeling and user-specific insights, this comprehensive system contributes to enhancing trading precision and user empowerment. This work can be useful in decision making for a wide range of stock market participants, as well as for institutions specialized for this area of operation.

Determinants of Stock Market Participation

Determinants of Stock Market Participation

Rethinking the Stock Market Participation Puzzle: A Qualitative Approach

Rethinking the Stock Market Participation Puzzle: A Qualitative Approach

Relationship of financial literacy to stock market participation

The research objective aimed to understand and analyze stock market participation among the millennial population in Indonesia. Specifically, this study tested stock market participation against the financial literacy variable. It employed a causality research type with a quantitative analysis approach using path analysis method. The sampling technique was purposive sampling, targeting the millennial and Generation Z populations. The model used was Structural Equation Modeling (SEM) Partial Least Square (PLS) through the Smart PLS software. The research variables included Financial Literacy (LF) with indicators (basic financial knowledge, saving and borrowing, protection, investment) and Stock Market Participation (SMP) with indicators (intention to invest in the stock market, motivational, income, reference to social interaction). The results showed that Financial Literacy significantly affects stock market participation. The final recommendation of this study related to investments in the capital market, especially stocks, is that relevant institutions, particularly the Indonesia Stock Exchange and organizations within it, together with the Financial Services Authority, should continue to provide well-organized education to improve investment understanding among millennials and Generation Z, considering the significant potential of these two generations as technology advances rapidly.

Governance mechanism to improve sustainability report quality: the impact on information risk and stock market participation

PurposeThis study aims to examine the effect of sustainability report quality (SRQ) on information risk. This research also aims to examine the effect of SRQ on stock market participation through information risk.Design/methodology/approachThe research sample includes 120 firm-years listed on the Sri Kehati Index period of 2017–2021. The hypothesis test uses firm and industry effect regression analysis. SRQ is measured by the existence of a sustainability committee and external assurance. The information risk is measured by bid-ask spread. Stock market participation is measured by volume of stock trading.FindingsBased on the data analysis, this investigation finds that SRQ reduces information risk. This research also finds that SRQ improves stock market participation by reducing information risk.Originality/valueFirst, this examination gives new evidence of SRQ to promote information environment improvement. Second, this examination contributes to providing the role of SRQ in an emerging market, such as Indonesia. Third, this examination contributes to providing the evaluation standard for sustainability reporting quality in Indonesia, since Indonesia has no specific standard for the sustainability report. Fourth, this examination contributes to filling the previous gap.

Immigrants and natives’ financial decision making: Evidence from Türkiye

This study investigates the causal effects of Syrian migrants on the financial behavior of natives in Türkiye. Utilizing a comprehensive administrative data set, we employ a two-stage least square (2SLS) estimation technique that isolates causal effects by exploiting substantial exogenous variation in the share of migrants relative to natives, arising from the geographical proximity to Syrian governorates of a specific province. Results indicate that immigrants have no significant overall effects on the financial decisions of natives. We find no conclusive evidence that migrant influx promotes overall stock market participation at both extensive and intensive margins. Moreover, our investigation reveals a minimal variation in direct stock ownership or the wealth invested in stocks. We observe neither economically nor statistically significant effects on the share of natives holding bonds or funds. Additionally, no discernible impact of migrants on the wealth per capita invested in bonds, funds, and the overall stock market emerges. However, we find limited evidence suggesting that migrants contribute to an increase in the share of wealth invested in stocks, albeit with a corresponding decrease in the share of wealth allocated to funds. Lastly, we explore the heterogeneity in the effects of immigrants by gender, but our findings reveal no significant variation by gender.

Narrow framing and under-diversification: Empirical evidence from Chinese households

Using unique survey data from the China Household Finance Survey, we estimate the extent of “narrow framing”, which is a widely documented behavioral bias, among Chinese households, using their portfolio choices. Conditional on stock market participation, we find that most Chinese households exhibit significant narrow framing. Based on the obtained estimates, we show that narrow framing positively predicts the extent of under-diversification. Most importantly, we argue that narrow framing is an irreplaceable of understanding households' portfolio choices, even after considering measurement error and a wide set of indicators of diversification.

A Study of Students Stock Market Participation and Awareness

Aim of research is to find out how well-informed and involved students are in the stock market. Students who have some background in stock market are more probable to have good grasp of personal finance and to make prudent financial choices in the road, according to the research. Students might get a feeling of agency and mastery over their own financial destiny by investing in the stock market.We can, however, state that students should not engage in the stock market without first fully comprehending the dangers of doing so and then proceed with extreme care and a focus on the long term. According to the research, college students would be well-served by programs that teach them about money and the stock market.