Internet use, household financial market participation and portfolio choice: evidence from China

Purpose This study aims to investigate the impact of Internet use on household financial market participation and portfolio choice. Design/methodology/approach Based on the Chinese General Social Survey 2017 (CGSS2017), this study empirically explores whether Internet use affects household financial market participation in China with an Endogenous Switching Probit model. Findings The results show that households using the Internet are more likely to invest in financial markets. Further research shows that households with high Internet use are significantly more likely to participate in financial markets than households with low Internet use. From the perspective of household portfolio choice, Internet use has a certain role in increasing the probability of portfolio diversification. However, among households that have invested in financial markets, those with a high-frequency use of the Internet do not show an impact on portfolio diversification. Originality/value This study complements existing research about the impact of Internet use or not on household financial market decisions and portfolio choice, expands the knowledge on the household financial market choice from the respective of the degree of Internet use.