Investors’ trust and financial participation: Latent difficulty measurement

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This study uses trust theory and the Rasch measurement method to identify the latent diversification difficulties for Taiwanese individual investors. In terms of benevolence-based trust, investors are most doubtful of the portfolio choices of neighbors and friends, whereas they are least doubtful of workplace retirement plan as well as listed and well-known companies. In terms of competence-based trust, investors are most doubtful of information accuracy and access, whereas they are least doubtful of investment product familiarity and information sources. Female investors significantly distrust their social network; by contrast, married investors in their mid-30s and with lower education significantly distrust financial intermediaries. In terms of income level, it insignificantly influences the benevolence- and competence-based trust difficulties of investors. Investors in the northern region of Taiwan benefit the most from financial interaction and significantly put more benevolence-based trust and competence-based trust compared with investors in the southern and central regions, respectively. Investment experiences insignificantly influence the development of trust; nevertheless, investors experience more difficulty in trusting their social network in terms of benevolence-based trust than in trusting financial intermediaries in terms of competence-based trust.

Original languageEnglish
Pages (from-to)87-98
Number of pages12
JournalAsia Pacific Management Review
Issue number2
Publication statusPublished - 2020 Jun

All Science Journal Classification (ASJC) codes

  • Business and International Management
  • Strategy and Management


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