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Stock Market Participation Puzzle: Social Engagement on Social Media Platforms

Ormotsadze, Giorgi LU (2024) SIMZ51 20241
Graduate School
Abstract
This study attempts to unravel the stock market participation puzzle. It approaches the puzzle with the idea that access to information reduces entry costs and, hence, encourages stock market participation. The literature suggests that information dissemination occurs through social interaction. Therefore, higher social engagement increases the odds of stock market participation. This study questions the established relationship due to the increased usage of social media, which has altered traditional forms of interaction. The findings fail to recognize a statistically significant impact of social media on stock market participation or the strength of social ties. The study is based on data from the UK Household Longitudinal Study (UKHLS).... (More)
This study attempts to unravel the stock market participation puzzle. It approaches the puzzle with the idea that access to information reduces entry costs and, hence, encourages stock market participation. The literature suggests that information dissemination occurs through social interaction. Therefore, higher social engagement increases the odds of stock market participation. This study questions the established relationship due to the increased usage of social media, which has altered traditional forms of interaction. The findings fail to recognize a statistically significant impact of social media on stock market participation or the strength of social ties. The study is based on data from the UK Household Longitudinal Study (UKHLS). The analysis is conducted using fixed-effect logistic regression and simple logistic regression. Proxies for measuring social interaction include the frequency of engagement with neighbors and the number of social groups in which the observed individual actively participates. According to the findings traditional forms of interaction remine as important channels for information dissemination, nonetheless of social usage rate. (Less)
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author
Ormotsadze, Giorgi LU
supervisor
organization
course
SIMZ51 20241
year
type
H2 - Master's Degree (Two Years)
subject
keywords
Stock market participation, social media, social engagement, strong and weak ties, financial decision making, equity premium puzzle
language
English
id
9170415
date added to LUP
2024-08-12 16:01:04
date last changed
2024-08-12 16:01:04
@misc{9170415,
  abstract     = {{This study attempts to unravel the stock market participation puzzle. It approaches the puzzle with the idea that access to information reduces entry costs and, hence, encourages stock market participation. The literature suggests that information dissemination occurs through social interaction. Therefore, higher social engagement increases the odds of stock market participation. This study questions the established relationship due to the increased usage of social media, which has altered traditional forms of interaction. The findings fail to recognize a statistically significant impact of social media on stock market participation or the strength of social ties. The study is based on data from the UK Household Longitudinal Study (UKHLS). The analysis is conducted using fixed-effect logistic regression and simple logistic regression. Proxies for measuring social interaction include the frequency of engagement with neighbors and the number of social groups in which the observed individual actively participates. According to the findings traditional forms of interaction remine as important channels for information dissemination, nonetheless of social usage rate.}},
  author       = {{Ormotsadze, Giorgi}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{Stock Market Participation Puzzle: Social Engagement on Social Media Platforms}},
  year         = {{2024}},
}