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The geography of stock market participation: the influence of communities and local firms
This paper is the first to investigate the importance of geography in explaining equity market participation. We provide evidence to support two distinct local area effects. The first is a community ownership effect, that is, individuals are influenced by the investment behavior of members of their community. Specifically, a ten percentage-point increase in equity market participation of the other members of one's community makes it two percentage points more likely that the individual will invest in stocks, conditional on a rich set of controls. We find further evidence that the influence of ...