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Decisions in the stock markets are made by individuals and influenced by financial sophistication and emotions. Accordingly, the current study investigates the impact of financial sophistication and emotional quotient on stock market participation. Empirical results demonstrated a positive association between motivation and stock market participation and, counter to the expectation, negative association between selfawareness and stock market participation. In today’s dynamic environment, cognizant application of financial knowledge ensures efficiency, modifies the basic relations, and hence moderates the relationship between self-awareness and stock market participation. According to this study as well, financial literacy does not moderate the relationship between motivation and stock market participation. Results are in line with the Western settings and can be well-generalized to the Pakistani settings, having implications at micro and macro levels for individuals, industrial managers, Shar¯ı‘ah scholars, and Islamic financial institutions. Study paved path for authorities of Islamic stock markets to structure trading system supported by motivation, self-awareness and financial sophistication of investors.

Muhammad Akhtar, Faqir Muhammad. (2017) Financial Sophistication, Emotional Quotient, and Stock Market Participation: Theory and Evidence, Journal of Islamic Business and Management, Volume 7, Issue 1.
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