Investment strategies and gender: a study of emerging patterns in India

Abstract

This study investigates the investment behaviours of suburban and rural investors in India with a particular interest in any observable differences in the approach to investment, in terms of attitude to risk and goals (‘investment strategy orientation’), in men and women. In the absence of local empirical literature, this study was based on typical frameworks for empirical research conducted outside of India. The sample was made up of employed persons, professionals, business-owners and housewives. The interviewees were made up of male and female subjects from different age groups, with varying income levels. Data were gathered through structured questionnaires as well as in-depth qualitative interviews. Investment analysts in the region were also interviewed.

The findings show that there are generally no significant differences by gender in terms of investment orientation of suburban/rural investors in India. This is contrary to a significant volume of previous findings. The knowledge of investors was considered by some local analysts to be ‘inadequate’ to operate effectively in the investment markets and this is also reported on.

The study urges that financial service suppliers and governments in developing countries take steps to popularize investment education programmes in order to better equip and motivate investors in suburban and rural regions. To avoid some of the conflicts of interests that accompanied a global collapse in the financial landscape of the West, however, it is also worth considering that the ‘moderation’ of investment aggressiveness and risk appetite displayed by the new investors in India may contribute to the establishment of a more stable financial climate.

Keywords:

• gender differences
• developing countries
• investment strategy orientation
• non-urban investors
• male and female investors

Acknowledgements

The authors would like to thank Dr Blu Tirohl, editor-in-chief at the JGS, for her help and guidance in the editorial process.

Notes

1. Quantitative change or expansion in a country's economy measured as the percentage increase in gross domestic product (GDP) (World Bank 2011).

2. A tiger economy is defined as one which undergoes rapid economic growth, usually accompanied by an increase in the standard of living (Wikipedia 2011).

3. The ability of land, labour or capital to be put to an alternative use or moved to another location (Grossman and Shapiro 1982).

4. According to the World Bank classification, developing countries are those that have low or middle levels of per capita income. More than 80% of the world's population live in the more than 100 developing countries (World Bank 2011).

5. A mutual fund pools the assets of its investors and invests the money on behalf of those investors (Wall Street Journal 2011).

6. Competition occurs when individuals use a shared resource in short supply (Heying 2004).

7. In the primary market, securities are offered to the public for subscription for the purpose of raising capital or funds. A secondary market is an equity trading avenue in which already existing/pre-issued securities are traded amongst investors (SEBI 2011).