Do Personality Traits, Trust and Fairness Shape the Stock-Investing Decisions of an Individual?
(2023)
This thesis is comprised of three projects, all of which are fundamentally connected to the choices that individuals make about stock investments. Differences in stock market participation (SMP) across countries are large and difficult to explain. The second chapter focuses on differences between Germany (low SMP) and East Asian countries (mostly high SMP). The study hypothesis is that cultural differences regarding social preferences and attitudes towards inequality lead to different attitudes towards stock markets and subsequently to different SMPs. Using a large-scale survey, it is found that these factors can, indeed, explain a substantial amount of the country differences that other known factors (financial literacy, risk preferences, etc.) could not. This suggests that social preferences should be given a more central role in programs that aim to enhance SMP in countries like Germany. The third chapter documented the importance of trust as well as herding for stock ownership decisions. The findings show that trust as a general concept has no significant contribution to stock investment intention. A thorough examination of general trust elements reveals that in group and out-group trust have an impact on individual stock market investment. Higher out group trust directly influences a person's decision to invest in stocks, whereas higher in-group trust increases herding attitudes in stock investment decisions and thus can potentially increase the likelihood of stock investments as well. The last chapter investigates the significance of personality traits in stock investing and home bias in portfolio selection. Findings show that personality traits do indeed have a significant impact on stock investment and portfolio allocation decisions. Despite the fact that the magnitude and significance of characteristics differ between two groups of investors, inexperienced and experienced, conscientiousness and neuroticism play an important role in stock investments and preferences. Moreover, high conscientiousness scores increase stock investment desire and portfolio allocation to risky assets like stocks, discouraging home bias in asset allocation. Regarding neuroticism, a higher-level increases home bias in portfolio selection and decreases willingness to stock investment and portfolio share. Finally, when an investor has no prior experience with portfolio selection, patriotism generates home bias. For experienced investors, having a low neuroticism score and a high conscientiousness and openness score seemed to be a constant factor in deciding to invest in a well-diversified international portfolio
Recent non-comparative studies diverge in their assessments of the extent to which German and Japanese post-Cold War foreign policies are characterized by continuity or change. While the majority of analyses on Germany find overall continuity in policies and guiding principles, prominent works on Japan see the country undergoing drastic and fundamental change. Using an explicitly comparative framework for analysis based on a role theoretical approach, this study reevaluates the question of change and continuity in the two countries" regional foreign policies, focusing on the time period from 1990 to 2010. Through a qualitative content analysis of key foreign policy speeches, this dissertation traces and compares German and Japanese national role conceptions (NRCs) by identifying policymakers" perceived duties and responsibilities of their country in international politics. Furthermore, it investigates actual foreign policy behavior in two case studies about German and Japanese policies on missile defense and on textbook disputes. The dissertation examines whether the NRCs identified in the content analysis are useful to understand and explain each country- particular conduct. Both qualitative content analysis and case studies demonstrate the influence of normative and ideational variables in foreign policymaking. Incremental adaptations in foreign policy preferences can be found in Germany as well as Japan, but they are anchored in established normative guidelines and represent attempts to harmonize existing preferences with the conditions of the post-Cold War era. The dissertation argues that scholars have overstated and misconstrued the changes underway by asserting that Japan is undergoing a sweeping transformation in its foreign policy.