Market Participation:comparing the second generation of migrants fromEU countries and East Europe

Rinaldo Naci ()
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Rinaldo Naci: Department of Economics, Ca' Foscari University of Venice

No 2022:06, Working Papers from Department of Economics, University of Venice "Ca' Foscari"

Abstract: This paper compares and evaluates the second generation of immigrants participating in the financial market with respect to their country of origin and in comparison to natives. Financial market participation differs significantly across countries, and the cultural dimensions could be a potential factor for that. In order to assess if this dimension matters, we exploited the influence that the socialist regime has had on the citizen of the East European countries. These individuals have grown a particular institutional context that has shaped a different culture regarding Western European countries. We rely on this heterogeneity and its intergenerational transmission to look for differences in the financial market participation. We show how simple theoretical models include in their specification coefficient for risk aversion, time preference, and trust. They can be the channel through which the cultural dimensions matter in the financial market participation. We show no difference in the financial market participation between the second generation of immigrants from EU countries and natives. At the same time, this difference is present when we compare them to the second generation from East European countries. Risk aversion and labor income seems to play the primary role in this heterogeneity in the financial market participation.

Keywords: Financial market; Portfolio choice; Immigration; Culture; SHARE (search for similar items in EconPapers)
JEL-codes: G11 G41 J15 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2022
New Economics Papers: this item is included in nep-eur and nep-mig
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