Neighbors Matter: Causal Community Effects and Stock Market Participation  

Oleh:

Brown, Jeffrey R. ; Ivkovic, Zoran ; Smith, Paul A. ; Weisbenner, Scott

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: The Journal of Finance (EBSCO) vol. 63 no. 3 (Jun. 2008), page 1509-1531.
Topik: Neighbors Matter; Causal Community Effects; Stock Market; Participation
Fulltext: P 1509.pdf (154.54KB)

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Perpustakaan Pusat (Semanggi) Nomor Panggil: JJ88 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Isi artikel

This paper establishes a causal relation between an individual's decision whether to own stocks and average stock market participation of the individual's community. We instrument for the average ownership of an individual's community with lagged average ownership of the states in which one's nonnative neighbors were born. Combining this instrumental variables approach with controls for individual and community fixed effects, a broad set of time-varying individual and community controls, and state-year effects rules out alternative explanations. To further establish that word-of-mouth communication drives this causal effect, we show that the results are stronger in more sociable communities.

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