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Do financial ethics matter in risky asset investment of households? Evidence from Japan

Author

Listed:
  • Hiroyuki Aman

    (Kwansei Gakuin University)

  • Taizo Motonishi

    (Kansai University)

  • Chisako Yamane

    (Hiroshima University of Economics)

Abstract

In this study, we examine how financial ethics, defined as an aversive attitude toward financial matters, influence households’ risky asset investments. By using a questionnaire survey on households in Japan, financial ethics are measured on multiple dimensions: psychological attitude toward money, normative attitude toward economic transactions, and unwillingness to disclose financial information. Overall, evidence supports the financial ethics hypothesis that people with a high level of financial ethics are reluctant to invest in risky assets. Particularly, decisions to participate in the stock market are impaired by strong financial ethics. The hypothesis is partly supported for the percentage shares of stock holdings and investment in a broad class of risky assets. Furthermore, our mediation analysis reveals that financial ethics not only directly discourage investment but also have an indirect effect through reduced financial literacy.

Suggested Citation

  • Hiroyuki Aman & Taizo Motonishi & Chisako Yamane, 2024. "Do financial ethics matter in risky asset investment of households? Evidence from Japan," International Journal of Economic Policy Studies, Springer, vol. 18(2), pages 387-414, August.
    • Handle: RePEc:spr:ijoeps:v:18:y:2024:i:2:d:10.1007_s42495-024-00134-2
    DOI: 10.1007/s42495-024-00134-2
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    More about this item

    Keywords

    Household finance; Financial ethics; Risky investment; Questionnaire survey;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets
    • G50 - Financial Economics - - Household Finance - - - General

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