Abstract
Based on a large international survey, we analyze how German-, French-, and Italian-speaking residents of Switzerland differ in their investment decision behavior and investment competence compared to their closest neighbors abroad who speak the same language. Although language may be closer to the individual self than country of residence, we find that there are greater similarities in the decision behavior of residents of Switzerland speaking different languages than there are between these and their linguistically closest neighbors abroad. These similarities hold also for the ability to avoid investment mistakes, which is stronger in all Swiss regions compared to the linguistically closest regions abroad. The Swissness in investment competence is more likely to be emotionally than knowledge driven and is associated with regional differences in the relationships with investment advisors.
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Notes
We chose the regions Baden-Wuerttemberg and Bayern in Germany, Lombardia, Piemonte, and Veneto in Italy, and Alsace, Franchecomte, and Rhone-Alps in France.
The market research agencies use panels comprising individuals who have agreed to participate in online surveys. The participating individuals have a variety of professional backgrounds and experience in various industries. The target participants receive information on the goal of the study, general information on the questions, and an estimate of the maximum amount of time required to answer the questions. Based on this information, participants decide whether or not to participate in the survey. Compensation is received upon completing the survey.
Principal component analysis indicates that investment experience is generally not limited to a particular asset class, and experience with different asset classes can be well summarized with one measure.
The Swiss Labor Force Survey is based on statements from about 4000 participants with permanent residence in Switzerland.
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We thank the Baloise Group for financial support in collecting the data. Comments provided by Christian Dreyer, Marc-Oliver Rieger, Mei Wang, Manish Gupta, Michal Dzielinski, the participants of the 2015 annual meeting of the Swiss Society of Economics and Statistics, and two anonymous referees are greatly appreciated.
Appendix
Appendix
1.1 A. Variable specifications
Financial income is the household’s net disposable income. We use the following equivalents:
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\({\le }20{,}000\) Euro and \({\le }50{,}000\) Swiss franks
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20,000–50,000 Euro and 50,000–100,000 Swiss franks
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50,000–80,000 Euro and 100,000–150,000 Swiss franks
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\({\ge }80{,}000\) Euro and 150,000 Swiss franks.
Financial wealth is the household’s net disposable wealth (without real estate) (e.g., cash, financial assets such as equities, bonds, funds, and pension savings such as 3a saving accounts used in Switzerland). We use the following equivalents:
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\({\le }30{,}000\) Euro and \({\le }100{,}000\) Swiss franks
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30,000–70,000 Euro and 100,000–200,000 Swiss franks
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70,000–100,000 Euro and 200,000–300,000 Swiss franks
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\({\ge }100{,}000\) Euro and 300,000 Swiss franks.
1.2 B. Further tests
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Bachmann, K., Hens, T. Is there Swissness in investment decision behavior and investment competence?. Financ Mark Portf Manag 30, 233–275 (2016). https://doi.org/10.1007/s11408-016-0274-8
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DOI: https://doi.org/10.1007/s11408-016-0274-8