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

Asgharian, Hossein LU ; Liu, Lu LU and Lundtofte, Frederik LU (2014) In Working Paper / Department of Economics, School of Economics and Management, Lund University
Abstract
We explore the relation between institutional quality, trust and stock-market participation. In our theoretical model, agents update their beliefs in a Bayesian manner based on observations on frauds and choose whether to invest in the stock market. The corresponding empirical model shows that institutional quality affects trust and that the part of trust that is explained by institutional quality influences stock-market participation. For immigrants, we consider learning factors, such as education and duration of stay, and we find that the impact of the institutional quality of the country of residence, relative to that of the home country, tends to increase with education.
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author
organization
publishing date
type
Working Paper
publication status
published
subject
keywords
institutional quality, learning, trust, stock-market participation
in
Working Paper / Department of Economics, School of Economics and Management, Lund University
issue
39
pages
48 pages
publisher
Department of Economics, Lund Universtiy
language
English
LU publication?
yes
id
1ca656d1-d049-4a82-866d-1ca629207a9e (old id 4814740)
alternative location
http://swopec.hhs.se/lunewp/abs/lunewp2014_039.htm
date added to LUP
2014-11-27 16:39:25
date last changed
2016-04-16 08:04:28
@misc{1ca656d1-d049-4a82-866d-1ca629207a9e,
  abstract     = {We explore the relation between institutional quality, trust and stock-market participation. In our theoretical model, agents update their beliefs in a Bayesian manner based on observations on frauds and choose whether to invest in the stock market. The corresponding empirical model shows that institutional quality affects trust and that the part of trust that is explained by institutional quality influences stock-market participation. For immigrants, we consider learning factors, such as education and duration of stay, and we find that the impact of the institutional quality of the country of residence, relative to that of the home country, tends to increase with education.},
  author       = {Asgharian, Hossein and Liu, Lu and Lundtofte, Frederik},
  keyword      = {institutional quality,learning,trust,stock-market participation},
  language     = {eng},
  number       = {39},
  pages        = {48},
  publisher    = {ARRAY(0x8cf0990)},
  series       = {Working Paper / Department of Economics, School of Economics and Management, Lund University},
  title        = {Institutional Quality, Trust and Stock-Market Participation: Learning to Forget},
  year         = {2014},
}