Abstract: In recent years, the rapid popularity of mobile payment has exerted a significant influence on family financial behavior. Based on the data of China Household Finance Survey (CHFS) from 2017 to 2019, this paper empirically studies the impact of mobile payment on households’ participation in stock market and the resultant return. In order to overcome the endogeneity problem, bidirectional fixed effect and instrumental variable method are used for estimation. Empirical results show that mobile payment can improve the probability of family participation in the stock market. In addition, this paper finds that mobile payment does not significantly promote stock earnings. Mechanism analysis shows that mobile payment mainly promotes households’ participation in the stock market through financial information acquisition, changing risk attitude, improving trust and improving credit availability. Regional heterogeneity analysis shows that mobile payment has a more obvious effect on families in towns, tier 1-3 cities and areas with strong financial availability. Heterogeneity analysis of family characteristics indicates that mobile payment has a more prominent effect on young families, middle-and high-income families and families with middle and high asset value. This study provides a new perspective for understanding the mystery of limited participation in the stock market and provides a reference for formulating relevant policies.

Key words: mobile payment, participation in stock market, stock market returns, information acquisition, risk appetite