Social Capital, Mobilized Information Networks, and Risky Investment

This study reviews several Taiwanese researches that relate to the behavior of participating in risky investment from the view of social capital to the view of sociology of knowledge, and attempts to bring extant quantitative data into conversation with extant qualitative research. After comparing the former studies, I construct a model emphasizes on typology of mobilized information networks to explain the behavior of participating in risky investment. Since this paper focuses on how investors get information, I use the data of Taiwan Social Change Survey period 5^th time 3^rd (2007) and classify sixteen types of investors by distinguishing mobilized information networks into sixteen types. These types of mobilized information networks indicate each of the sixteen groups of investors has different “information-knowledge” social ability, by which investors recognize the reality of financial market. Without knowledge foundation, investors can just understand very limited information; without special information channels, investors cannot form complete information-knowledge. I argue that mobilized information networks can explain risky investment behavior better than general social capital capacity.

This paper controls several important social and economic status variables, and controls risk acceptance degree of investors as well, and then run following models separately: (1) use social capital variable as independent variable on risky investment behavior, (2) use social capital variable as independent variable on sixteen types of mobilized information networks separately, (3) let social capital variable be controlled also, and use mobilized information networks as independent variable on risky investment behavior. After comparatively analyzing the result, I prove the argument of mobilized information networks can explain risky investment behavior better than general social capital capacity.