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Is Financial Knowledge Important for Internet Financial Participation?

【Authors】
YIN Zhichao, QIU Hua
【WorkUnit】
Capital University of Economics and Business, 100070.
【Abstract】

With the development of Internet finance, opportunities and challenges coexist, so do benefits and risks. As a vital factor affecting individual financial behaviors and decisions, will financial knowledge affect people's participation in Internet finance? Which are easier to take part in the Internet financial market? Do the participants in Internet finance make windfall profits or in vain? Against the background of rapid development of Internet finance, the answers to these questions are crucial. Based on the data of China Household Finance Survey (CHFS) in 2017, we empirically validate the influence of financial knowledge on Internet financial participation. The results show that the financial knowledge has a significant role in promoting Internet financial participation. In terms of groups, financial knowledge has a stronger impact on the young, middle-aged, male and middle-class groups. For those who have received higher education or engaged in the financial industry, financial knowledge significantly promotes the participation in Internet finance. Furthermore, we conclude that financial knowledge promotes participation in Internet financial management, but has no obvious influence on obtaining investment returns. Therefore, in order to reduce the risk of Internet finance and promote its healthy development, we should pay more attention to individual investors and popularize financial knowledge, so that investors will make rational decisions.

 

JEL:G10, G11, D83

【KeyWords】
Financial Knowledge, Internet Finance Participation, Depth of Internet Finance Participation