Financial statement literacy of individual investors in China
Document Type
Article
Publication Date
1-1-2018
Abstract
Financial statement literacy is vital in helping individuals make good long-term stock investment decisions and is especially relevant in China where individual investors account for 85 per cent of stock market activity. To delve more into this issue, we examine relevant literature on individual investor behaviour, financial literacy and investment analysis respectively. We note an overall lack of financial literacy studies in China. Furthermore, financial statement literacy has received limited attention in all three streams of literature. This is possibly due to the lack of a systematic model for measuring financial statement literacy. Indeed, current studies tend to rely on secondary data and financial statement literacy is measured in a limited manner. We therefore propose a model in which financial statement literacy is evaluated through three dimensions, namely knowledge, attitudes and behaviour. The model can be extended to examine the influence of financial statement literacy on stock investment decision-making.
Keywords
Financial literacy, Financial statements, Investment decision-making, Investor education
Divisions
Faculty_of_Business_and_Accountancy
Publication Title
International Journal of China Studies
Volume
9
Issue
1
Publisher
Institute of China Studies