Beyond Fundamentals: The Role of Peer Influence, Salience, and Financial Literacy on Meme Stock Investing

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2025-07-08

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en

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This thesis explores why people invest in meme stocks by evaluating how peer influence, social media, and financial literacy shape these decisions. Using data from the 2021 NFCS Investor Survey, several logistic regression models were created. These models test how different factors, such as the influence of peers, the use of platforms like TikTok, Reddit, or Instagram, and how knowledgeable people feel about investing, affect meme stock participation. The results show that both peer pressure and the use of highly visual platforms play a big role in driving meme investing. Interestingly, people who rate their financial knowledge as high are not necessarily less likely to invest in meme stocks. They might even be more likely to follow others because they possibly feel more confident. The thesis also looked at indirect relationships and found that social media can increase peer effects, and financial literacy might either reduce or strengthen that effect depending on the situation. These results show that investing is increasingly influenced by what people see and feel online and not just by fundamentals. While the study gives useful insights, it is limited by the self-reported and cross-sectional nature of the data. More research is needed to follow these behaviors over time.

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Faculteit der Managementwetenschappen

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