Weiqiang Zhang

Bio: Weiqiang Zhang is an academic researcher from Tsinghua University. The author has contributed to research in topics: Financial literacy & Financial analysis. The author has an hindex of 2, co-authored 2 publications receiving 113 citations.

Financial Literacy, Portfolio Choice, and Financial Well-Being

Abstract: This study examined potential effects of financial literacy on household portfolio choice and investment return, an indicator of financial wellbeing. Using data from the 2014 Chinese Survey of Consumer Finance, financial literacy was measured and further categorized into basic financial literacy and advanced financial literacy. This study tested the hypothesis that financial literacy affects household choice between stock and mutual fund. The results indicated that households with higher financial literacy, especially those with higher level of advanced financial literacy tended to delegate at least part of their portfolio to experts and invest in mutual fund. However, households who were overconfident about their financial literacy tended to invest by themselves and were more likely to hold only stocks in their portfolios. The findings also indicated that households with higher financial literacy had a better chance of receiving a positive investment return, suggesting that higher financial literacy may result in a better financial outcome.

Financial literacy and risky asset holdings: evidence from China

Abstract: Although financial literacy is important for participating in financial markets, the level of financial literacy of Chinese consumers is low compared with those in developed countries. Using data from the 2014 China Survey of Consumer Finances, we examine the relation between financial literacy and the risky asset holding behaviour of Chinese households, in the context of an emerging financial market with a distinct institutional background. The findings reveal that consumers with higher levels of financial literacy are more likely to hold risky financial assets than those with lower levels. The potential impacts are derived mainly from advanced financial literacy.

Financial Knowledge and Short-Term and Long-Term Financial Behaviors of Millennials in the United States

Abstract: This study investigates the role of financial knowledge in various short-term and long-term financial behaviors among Millennials in the United States. Results from the 2015 National Financial Capability Study (NFCS) indicate that Millennials have lower levels of objective financial knowledge and similar levels of perceived financial knowledge as compared to all households. Consistent multivariate results find financial knowledge to be positively associated with performing positive short-term and long-term financial behaviors. Results are found to be robust across different measurements of financial knowledge and behavior, and the issue of the potential for reverse causality is specifically addressed. This study provides a comprehensive financial profile of Millennials with important insight for policymakers as well as financial practitioners.

Financial literacy and retirement preparation in China

Abstract: A growing body of literature, which primarily focuses on the developed world, investigates the implications of financial literacy (or lack thereof) on households' well-being. This paper examines the level of financial literacy and its impact on retirement preparation in China, a country that is growing old before getting rich. Drawing on internationally comparable survey questions, we find that a large proportion of Chinese people, especially the elderly, women, and under-educated, lack financial knowledge. The empirical results show that financial literacy has a strong and positive impact on various aspects of retirement preparation among Chinese people, including determining retirement financial needs, making long-term financial plans, and purchasing private pension insurance. Our findings suggest that concrete measures are needed to improve financial literacy so as to increase the awareness of retirement preparation in China.

Financial Literacy in Developing Countries

Abstract: Focusing on different facades of financial well-being such as wealth accumulation and retirement planning, various determinants of financial well-being have been unearthed, and financial literacy has emerged as a crucial factor that increases financial well-being. Hence, financial literacy has been an important policy instrument to increase the financial well-being of individuals, particularly given that it is relatively easy to implement. This paper is an attempt to pave the way for such policies in a group of middle income countries, namely Mexico, Lebanon, Uruguay, Colombia and Turkey. After establishing financial literacy levels, we identify the least financially literate groups in each country to facilitate targeting of public policy. We find that women, younger adults and individuals who cannot read or write in the official language of their country of residence have lower financial literacy scores. In line with the previous findings in the literature on the developed countries, our results indicate that financial literacy increases with education. We also show that it is not only the years of education, but also the quality. In Mexico and Turkey, there are large regional differences that must be addressed. We also find that differences in financial literacy across countries persist even when differences in structural characteristics are taken into account. A partial explanation may be provided by differences in financial inclusion.