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MAGNT Research Report (ISSN. 1444-8939)
Vol.2 (4):PP. 4050-4057
Effective Factors on Public Participation in the Capital Market (Case study: East
Azarbaijan Regional Stock Exchange)
Nazila Helmi*1, Hossein Bodaghi Khajeh Noubar2 and Khadijeh Khadivi Javngleh3
1
2
Department of Management, East Azarbaijan Science and Research Branch, Islamic Azad University, Tabriz, Iran.
Department of Management, East Azarbaijan Science and Research Branch, Islamic Azad University, Tabriz, Iran.
3
M.sc instructor in Economics at PNU Universit, Gowgan Branch, Iran.
Abstract
This paper aims to investigate the effective factors on public participation in the East Azerbaijan regional stock
exchange capital market. The statistical population consisted of all referrers to Tabriz stock exchange agencies in
Iran. In this research, 2200 individuals were selected as the statistical population (averagely in weeks 18 and 19 of
2013 about 100 individuals had been referd to each agency in Tabriz. (Averagely 2200 individuals have referd to22
agencies in Tabriz).The statistical sample was estimated 327 individuals based on Cochran formula. The hypotheses
were analyzed by Regression test and correlation coefficient. The results showed that all hypotheses except
stockholders culture in external factors impact on the public participation. Also, regression test indicates linearity of
the persuasion of the people to investment.
Key words: investment, stock exchange, public participation
Introduction
Investment, as an economic development and growth
motor, is important for all countries in the
world(Ahnagari,2008).It is necessary to remember
that inattention to this component can be considered
as a factor for economic decline (Helmi,2013).So,
economic development and increase of public
welfare in long term is impossible with inattention to
investment and its effective factors. The exact study
and analysis of the investment and its effective
factors in the investors active environment could
reduce inflation rate and liquidity in one hand and
increase of employment and improve management
and enhance wealth of the investor in other hand
(Samadi,2008). According to this fact that investment
is done in different ways, by providing possibility of
investment in the firms that are subjected to offer
their stock for public, stock exchange could play
significant role in dynamicity of the firms and
economics(Khodaei and Yahyaei,2010).So, the firms
by offering their share by stock exchange and the
investors by purchasing share and investment in the
firms, stock provide possibility of participation in
economic development and consider themselves as
an
active
in
economy
development(Khataei,1999).According to this fact
that there are numerous opportunities for investment
and unplanned investment in Iran ,stock exchange
plays a main role in this regard(Saedi,2008).Thus,
identification of the investors behavior and its
prediction can be considered as effective step in
persuasion of the public in participation in the capital
market.
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Different factors influence on public participation in
the capital market. For example1- Shareholding
culture: working culture in a society can be effective
in stability of the society. Thus, investment culture in
stock exchange and stock market and allocating some
part of the investment to land ownership, dwelling,
automobile and others and in stock exchange could
persuade the individuals in investment in this sector.
So, shareholding culture in stock exchange can be
defined as institutionalization of the allocating some
part of investment in stock exchange (Safari,2005).
Geographic allocation: in developing countries due to
lack of sufficient development of internet and related
issues and lack of electronic transaction
infrastructures(electronic
commerce,
electronic
banking, supporting regulations and etc) investment
in stock and stock exchange is carried out in
traditional way in stock exchange forums (Abzari
and Safari,2006).Thus, establishment of forums and
agencies in proper location and easy access facilities
to investment in stock exchange can be considered as
a progressive factor or preventive factor in persuasion
of the public participation in investment in stock
exchange(Maya, 2003); Political and economic
factors: stock exchange as a reflector of national
economic directly is influenced by economic factors
and certainly, economic factors impact on the people
who
want
to
invest
in
stock
exchange(Abzari,Samadi,Safari,2007:10).Also, due
to influence on economic issues, political factors
influence indirectly on the stock exchange and its
progress and decline. So, political revolution and
shifts could be considered as effective factor in
investment
in
stock
exchange(Niya,2003);
MAGNT Research Report (ISSN. 1444-8939)
Advertisement and information dissemination; from
the past advertisement has been used in business for
persuasion of the individuals for purchasing products
and services and every day its role is added (Abzari,
Samadi
and
Safari,2007:10).Nowadays,
advertisement and information dissemination has
been employed in financial and investment sector as
a tool for awareness of investment, legal issues,
minimum investment level, investment return,
minimum expected return and etc. So, advertisement
by media by stock exchange could persuade the
individuals
in
investment
in
stock
exchange(Maya,2003).According to the above factors
and review of literature the aim of this research is to
investigate the effective factors on public
participation(internal factors: dividend, stock price,
investment risk and expected return rate; external
factors: economic and political factors, geographical
location,
advertisement
and
information
dissemination and shareholding culture) in East
Azerbaijan regional stock exchange capital market.
Review of literature
1-In a research on the role of reference group in
persuasion of the individuals in investment in stock
exchange in 2007(case study: Isfahan stock
exchange),Abzari,Samadi and Safari concluded that
the research hypothesis of reference group role in
persuasion of the individuals in investment in Isfahan
stock exchange is confirmed; the statistics of
secondary questions is confirmed by the second
questionnaire concerning on the being affectedness of
the reference group from macro factors like
shareholding
culture,economic
and
political
factors,also, concerning on the being affectedness of
the reference group by micro factors like
advertisement , agencies and geographical location of
the stock exchange are rejected and and it is
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confirmed related to profitability(Abzari,Samadi and
Safari,2007).
2-In 2013, a research was carried out as solutions for
increase public participation in the country capital
market in Yazd regional stock exchange by Osku and
Soltani. The results showed that all hypothesis are
accepted except hypothesis of significant relationship
between investor needs and accessibility. Also,
regression test indicated linearity of the prediction
models for persuasion of the individuals for
investment,needs and expectations of the investors
(Osku and Sultani,2010).
3-Enayat(2001) investigated the problems of the
capital market and introduced five categories of the
problems and barriers: legal infrastructures, capital
market structural barriers,market information system,
participants problems and economic,social and
cultural barriers(Enayat,2001).
4Mokhtairyan(2004)
and
Warneryd(2001)
investigated the effective factors on investors
decision making and found that following factors
influence on the capital market: political factors;
profitability record;economic factors; shareholding
culture; agencies operation;price trend; industry;stock
price; firmidentification base;geographical location;
financial statements; financial ratios, accountancy
tool; advertising and public training conditions.
5-Halstead
(2002),
Taylor
(2002)
and
Warnyd(2003)emphasized on the importance of
dividend and stock characteristics in decision making
on investment to buy stock.
6-Merikas et al (2003) and Al Tamimi(2006)
investigated the importance of the effect of financial
and accountancy information and Sultana(2010)
investigated the effect of demographic factors like
gender,age, study level and marital status and
behaviors such as self conception and external
behaviors like manner of investment on the decision
making for investment.
MAGNT Research Report (ISSN. 1444-8939)
Research
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conceptual
model
Economic and
political factors
Advertisement
and information
Shareholding
culture
External
factors
Effective
factors
Public
participation
Geographicallocat
ion
Independent variable
Methodology
This research is applied (Masoumi and et al,2013)
and survey descriptive from method and filed
study.The data were collected by library and field
study(Masoumi,2013).For collection of the data on
subject literature,library method like magazine,
domestic and foreign MA theses and reports on stock
exchange and computer sites and questionnaire were
employed. The reliability depicts the level of
compatibility of the questionnaire in measuring a
concept(Beheshti,2013).The reliability of this
research is 0.815 and since it is higher than 0.7 so the
questionnaire
is
highly
reliable.The
validitymeanscorrectness and accuracy of the
questionnaire (Attazadeh,2013).In this research the
validity of the questionnaire was confirmed by
content validity. The statisticalpopulationconsists of
all individuals, objects that they are common
Serial
1
2
3
Dependant
variable
minimum in one point (Attazadeh,2014).The
statistical population of this research consisted of the
investors referd to East Azerbaijan stock exchange
agencies for purchasing stock.The sample invoked
sings that selected from a large part or a group or a
society (Masoumi,2013).In this researchthe sample
was obtained 327 by Cochran formula with available
sampling method. The data were analyzed by
descriptive statistics and the hypotheses were tested
by inferential statistics like Spearman correlation test
and regression test.The extracted data of the
questionnaire spss 18 was employed.
Analysis of data
In this part at first the main demographic variables
like gender, income level, studies level ,age, marital
status and then hypotheses test have been mentioned.
Table (1) individual frequency distribution based on income
Income level
Frequency
Percentage
Valid percentage
Lower than 1000000*
64
19.6%
19.6%
From 1000000 to 1500000
112
34.3%
34.3%
From 1500000 to 2000000
98
30.0%
30.0%
Higher than 200000
53
16.2%
16.2%
Total
327
100.0%
100.0%
*toman
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Additive %
19.6%
53.8%
83.8%
100.0%
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Table 1 depicts the characteristics of the respondents
from income level. It can said that among %100 of
the respondents: % 19.6 has lower than 1000000
tomans income,% 34.3 has 100000 to lower than
1500000 tomans ,% 30.0 has from 1500000tomans to
lower than 2000000 tomans and %16.2 has 200000
and upper income.
Table (2) Individual frequency distribution based on study level
Study level
Frequency
Percentage
Valid percentage
Additive %
Diploma and under diploma
4
1.2%
1.2%
1.2%
Associate
18
5.5%
5.5%
6.7%
Bachelor of science
217
66.4%
66.4%
73.1%
Master of science
88
26.9%
26.9%
100.0%
Total
327
100.0%
100.0%
Table 2 depicts the respondents study level. It can be
%66.4 is Bachelor of Science and %26.9 is master of
said that among %100 respondents: %12 is diploma
science and upper.
and under diploma, %5.5 is with associate degree and
Serial
1
2
3
4
Table (3) Individual frequency distribution based on job
Income level
Frequency
Percentage
Valid percentage
Additive %
Unemployed
57
17.4%
17.4%
17.4%
Self employed
197
60.2%
60.2%
77.7%
Governmental job
73
22.3%
22.3%
100.0%
Total
327
100.0%
100.0%
Table 3 depicts the respondents’ job. It can be said
%60.2 is self employed and %22.3 has governmental
that among %100 respondents:% 17.4 is unemployed,
job.
Serial
1
2
3
Table (4) individual frequency distribution based on gender
Gender
Frequency
Percentage
Valid percentage
Female
86
26.3%
26.3%
Male
241
73.7%
73.7%
Total
327
100.0%
100.0%
Table 4 depicts the respondents’ gender. It can be
said that among %100 respondents:%26.3 is female
and %73.7 is male.
Serial
1
2
Additive %
26.3%
100.0%
Table (5) Main statistics of the effective factors on inventors’ participation in East Azarbaijan stock exchange
Dependant
Independent variable
variable
External factors
Public
participation
Geographical
location
Shareholding
culture
Advertisement
and
information
Economic and
olitical factors
Statistics
40.66
41.00
44
4.372
19.115
-0.300
28
50
22
14.67
16.00
16
4.096
16.774
-0.772
4
20
16
6.89
7.00
10
2.512
6.311
-0.378
2
10
8
9.46
9.00
15
4.789
22.930
-0.073
3
15
12
28.65
32.00
8
9.737
94.810
-0.861
8
40
32
Mean
Median
Mood
SD
Variance
Skewers
Min
Max
Conversion
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Table 5 depicts main statistics of the effective factors on inventors’ participation in East Azerbaijan stock exchange.
Normal and abnormal data
Table (6) the results of Kolomogrove- Smearnov of internal and external factors
Public
participation
Geographical
location
Culture
Advertisement
Economic and
political
factors
327
40.66
4.372
0.074
0.039
-0.074
1.345
0.054
327
14.67
4.096
0.141
0.097
-0.141
2.551
0.000
327
6.89
2.512
0.136
0.108
-0.136
2.452
0.000
327
9.46
4.789
0.188
0.143
-0.188
3.403
0.000
327
28.65
9.737
0.136
0.122
-0.136
2.458
0.000
Normal
Abnormal
Abnormal
Abnormal
Abnormal
No.
Sd mean
Normal
parameters
Absolute
Positive
Negative
Significant
difference
K-S
Sig
Results
Table 6 shows the results of Kolomogrove –Smearnov. According to the significance level that is lower than 0.05
for all variables except public participation, it can be said that all variables except public participation has abnormal
distribution.
Main hypotheses
External factors
First
impact on
main
public
hypoth
participation in
esis
capital market.
H1
H2
H3
Table (7) Hypotheses
Secondary hypotheses
Economic and political factors impact on public participation in capital market
Advertisement (information) impacts on public participation in capital market.
Shareholding culture impacts on public participation in capital market.
H4
Geographical location impacts on public participation in capital market
Table (8) Variables Spearman correlation results
Public participation
Variables
Correlation coefficient
Sig
Result
Economic and political factors
0.157
0.004
Yes
External factors
Advertisement and information
0.215
0.000
Yes
Geographical location
0.181
0.001
Yes
Shareholding culture
0.040
0.467
No
Table 8 depicts variables Spearman correlation
culture have a significant relationship with public
coefficient and significance level. According to the
participation. Among internal factors, advertisement
significance level that it is higher than 0.05 for a
and information has highest correlation coefficient
shareholding culture it can be said that there is no
(0.215).
relationship among, shareholding culture and public
For hypotheses one to four regression test was used.
participation. Also, all variables except shareholding
Model
1
Table (9) Independent variables, omitted variables and cases used for regression
Variable Entered
Variable Removed
Geographical location, economic and political factors, shareholding
0
culture, advertisement and information
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Method
Enter
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Table 9is the first regression output and depicts independent variables, omitted variables and cases used for
regression.
Table (10) multiple correlation coefficient, estimate and adjusted coefficients
Model
R
R square
Adjust R square
Std. error of the estimate
1
0.258
0.057
0.055
4.250
Table 10 is the second regression output and indicates multiple correlation coefficient, estimate and adjusted
coefficients.
Table (11) Results of analysis of regression variance among external variables
Model
Sum of Squares
df
Mean Square
F
Sig.
Regression
415.043
4
103.761
5.744
0.000a
1
Residual
5816.596
322
18.064
Total
6231.639
326
Table 11 is the third regression output. This table depicts results of analysis of regression variance to investigate the
certainty of the linear relationship among variables. The significance level is 0.000so; linearity of the model is
confirmed.
Table (12) Results of regression and constant value
Unstandardized Coefficients Standardized Coefficients
Model
t
Sig.
B
Std. Error
Beta
(Constant)
35.289
1.349
26.158 0.000
Economic and political factors
0.039
0.025
0.087
1.565
0.119
1 Advertisement and information
0.154
0.051
0.169
3.025
0.003
Shareholding culture
0.094
0.094
0.054
1.005
0.316
Geographical location
0.146
0.058
0.136
2.525
0.012
Table 12 depicts the results of regression and
people trust related to continuity of activities of the
constant value. According to the significance level in
investors, return and profitability.Sanctions and
table 12 it can be said that in regression modelall
political revolutions or change in economic indices
variables influence on the public participation except
impact negatively on people. In other hand, change in
economic and political, advertisement and
prices of items like dwelling and gold affects on the
information and geographical location factors. In
transactions and increase and decrease of price and
other hand, if independent variables are shown with
public participation. So, it is recommended to
X and dependent variable is shown with Y, the
progress in economic analysis and provide context
regression model is calculated as follows:
for production of the primary products inside the
country and transfer of technology that decrease the
0.146𝑥2 +0.154𝑥1 +γ = 32.289
impact of sanctions. The agencies of the stock are
According to beta coefficients, it can be said that
recommended to disseminate information on the
among mentioned external variables and residual in
advantages of investment in stock exchange that
the regression, advertisement and information have
influence positively on people participation.
the most impact on the public participation in the
According to the secondhypothesis it can be said that
capital market.
since identification of people on capital market can
be an effective factor in public participation so any
Conclusion
enhancing people awareness it can be increased
According to the results, economic factors,
publicparticipation in capital market. Since
advertisement
and
information
and
advertisement and information dissemination is one
geographicallocation are external factors that impact
of the marketing techniques so it is recommended the
on public participation in the capitalmarket that
actors of stock arrange marketing and investment
advertisement and information have the highesteffect
training courses and offer information on financial
in this regard, followings are proposed:
aspects of capital market and disseminate information
Concerning to first hypothesis it can be said that
by media that increases people awareness on capital
economic and political stability influence on the
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MAGNT Research Report (ISSN. 1444-8939)
market and investment in stock exchange and as a
result public participation.
Concerning to the effect of geographical location on
publicparticipation it is recommended that since
investment in stock exchange is carried out
traditionally in forums due to lack of sufficient
development of internet and related issues and
deficiency in electronic transactions infrastructures
like electroniccommerce, electronic banking and
related regulations.So, establishment of forums in a
proper location for easy access can be considered as
progressive factor.In other hand,establishment of
agencies in national level and provinces reduce time
required
for
investment
that
encouragespeopleparticipation
in
the
capital
market.Thus, observing required actions for
expansion of internet and considering electronic
transactions and related regulations and establishment
of agencies provide the investors
toaccess these agencies easily.
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