Undergraduate students’ intention to participate in the stock market
: an analysis of financial literacy as well as attitudinal and normative factors

  • Thomas Karl Heinrich Wagner

Student thesis: Doctoral Thesis


Background and Objective: Consumers are being confronted with increased responsibility for their own financial well-being and retirement planning. This reality is also highly relevant to young adults such as university students, who, upon entering professional life, need to make a high number of financial decisions, often with long-term implications and consequences. One noticeable phenomenon, frequently called the “stock market participation puzzle” (SMPP), is that consumers often refrain from owning stocks despite evidence that stock market participation (SMP) is highly beneficial for consumers. This puzzle is particularly relevant from a German perspective as German households frequently refrain from SMP preferring to place savings in low-risk and low-return investment products.

Study Design: This study addresses a gap in literature as SMPP is not well understood from a German perspective and prior SMPP research has not focussed on university students. Consequently, this study utilizes a quantitative approach based on an online self completion questionnaire distributed to undergraduate students at a German university (Reutlingen University). A total of 315 completed questionnaires (N = 315) were collected. The questionnaire is based on the “reasoned action approach” (RAA) framework relating the predictor variables attitude (FA), perceived social norms (PSN), and perceived behavioural control (PBC) as well as actual control (AC) to the outcome variable behavioural intention to participate in the stock market (BI), controlling for socio-demographic and character-based variables. Financial literacy (FL) is assessed in two distinct dimensions as objective (OK) and subjective financial knowledge (SK) and conceptualised as AC and PBC respectively within the RAA framework. The hypothesis testing applied bivariate and multivariate statistical analysis.

Results: The theoretical framework is highly relevant for explaining behavioural intention. The regression models achieve a good model fit with the predictor variables explaining between 58.1% and 64.5% of the variance in the outcome variable. All predictor variables as well as the variable actual control make statistically significant positive contributions to the prediction of BI. The empirical evidence suggests the existence of a gender gap in relation to both SMP and FL as female respondents achieve a lower level of OK, exhibit a lower level of SK, and consequently also demonstrate a lower BI than male respondents.
Date of Award2020
Original languageEnglish
Awarding Institution
  • University of Portsmouth
SupervisorKhaled Hussainey (Supervisor) & Rolf Daxhammer (Supervisor)

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