RT Journal Article
SR Electronic
T1 Does Financial Literacy Affect Stock Market Participation? Evidence from India
JF The Journal of Wealth Management
FD Institutional Investor Journals
SP jwm.2023.1.194
DO 10.3905/jwm.2023.1.194
A1 Tripathi, Smita
YR 2023
UL http://jwm.pm-research.com/content/early/2023/01/06/jwm.2023.1.194.abstract
AB This article investigates the impact of financial literacy on stock market participation in India. It uses a sample of 700 respondents from three Indian states. The probit regression model has been used to estimate the effect of financial literacy on stock market participation. We find that the most of respondents lack fundamental understanding of finances. Less literate people are less likely to buy equities. Financial literacy has a big impact on stock market participation in India. Additionally, demographic parameters including age, education, income, marital status, and gender are proven to have an impact on financial literacy and stock market involvement. This article adds to the body of recent literature by providing a microeconomic explanation for the stock market participation paradox.