Stock market participation through socialization: exploring the intervening role of financial well-being

Purpose Socialization, as a primary catalyst across spheres, plays a predominant role in shaping various financial behaviors, including stock market participation (SMP). However, the moderating role of financial well-being in this relationship remains underexplored. This study investigates how socialization influences SMP, mediated by financial well-being. Design/methodology/approach A cross-sectional design was employed with data collected from 380 active investors across five Indian cities using a structured questionnaire. AMOS was applied to evaluate the psychometric properties of the measurement model and to test the mediation effect of financial well-being via the structural model. Findings The results revealed that individuals with higher social engagement tend to participate more actively in the stock market, with this effect amplified by strong financial well-being, thus confirming its mediating role. Among social ties, weak ties had a stronger direct impact on SMP than strong ties. Also, online social interactions exerted a greater moderating influence on SMP than in-person interactions. The study also identified significant variations in socialization, SMP and financial well-being across different age groups, regions and income levels. Practical implications The study offers policy implications for stock market regulatory authorities by highlighting the need to oversee social media platforms (e.g. Facebook, LinkedIn and Instagram), financial influencers and advisors. It also recommends the need to create a transparent, informed and equitable trading environment through closer monitoring and accountability measures. Originality/value The research adds to the existing knowledge base by highlighting the crucial role of financial well-being and online social interaction in boosting the impact of socialization on SMP.