Local bias in investor attention: Evidence from China's Internet stock message boards

Huang, Yuqin; Qiu, Huiyan; Wu, Zhiguo

doi:10.1016/j.jempfin.2016.07.007

Cited by 111 publications

(22 citation statements)

References 23 publications

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“…on-course horse racing), we then introduced a large real-life online football gambling dataset. Previous work has suggested that sports fans have irrational preference toward their home teams and would bet predominately on their home teams, a phenomenon called the local bias or the home bias (French & Poterba, 1991;Huang et al, 2016). A broad set of driving forces have been suggested to give rise to this irrational bias.…”

Section: Home Bias In Sports Gamblingmentioning

confidence: 99%

The Bounded Ending Effect in the Domain of Football Gambling: High Risks Are Not Always Preferred at the End

2021

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Previous research has demonstrated that individuals present increased risk taking at the end of a series of gambles, a phenomenon called the ending effect. By using a large online football gambling data, we attempted to replicate the ending effect and tested the existence of a different pattern of increased risk taking at the ending. The results showed that at the end of a series of football gambles, bettors would take more risks, and options with lower risk would be preferred. In games without the interference of local bettors, the ending effect was found to be stronger than that of games with local bettors. Overall, the results provide evidence for the bounded ending effect. Possible underlying mechanisms of the bounded ending effect are explored.

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Section: Home Bias In Sports Gamblingmentioning

confidence: 99%

The Bounded Ending Effect in the Domain of Football Gambling: High Risks Are Not Always Preferred at the End

2021

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“…Eastmoney website provides the largest and the most influential financial portal; its effective browsing time accounts for 55.6 per cent of the total effective browsing time in financial portals in China [1]. At present, Eastmoney's internet stock message board is commonly used by researchers who focus on investor communication (Jiang et al, 2016), information diffusion (Ackert et al, 2016;Li et al, 2018;Hao et al, 2019), investor sentiment (Lai et al, 2014) and even investor attention (Huang et al, 2016;Zhang and Tao, 2018), which verifies that big data is a useful information (Coyne et al, 2018) . The CDT is a database of Eastmoney that covers high frequency data of stocks, securities, funds and commodities.…”

Section: Sample and Descriptive Analysis 31 Sample Selectionmentioning

confidence: 99%

Does advertising really work?

Dong

2020

IJAIM

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Purpose This paper aims to examine the direct and indirect effects of advertising on investor behavior. Design/methodology/approach The authors use a novel and direct measure of investor attention: the number of investors whose watch lists has the stock. Findings The authors find that beyond its direct effect through information dissemination, advertising has an indirect effect with regard to grabbing investor attention and the trading response. The authors further find that an increase in attention induces a positive influence on the impact of advertising on investor behavior. Originality/value First, it complements studies of home bias, in which investors are more likely to buy familiar stocks. Second, it also complements the literature on advertising and investor attention and on attention and capital markets. Third, with a new and unambiguous measure of investor attention. Fourth, combining the direct and indirect aspects, this study presents a detailed description of the financial market effect of advertising.

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“…Home bias refers to the phenomenon that investors have a strong preference for local assets and services (Coval & Moskowitz, 1999, 2001). A burgeoning literature has demonstrated that home bias affects choices on which equity to hold (Huberman, 2001; Lütje & Menkhoff, 2007), what message to post (Huang, Qiu, & Wu, 2016), which analyst to trust (Jia, Wang, & Xiong, 2017), which firm to acquire (Jiang, Qian, & Yonker, 2019), and the risk sharing between foreign and domestic investors (Lau, Ng, & Zhang, 2010). In this paper, we put forward that home bias also exists when investors pick what stories to read.…”

Section: Introductionmentioning

confidence: 99%

Investor reactions to local and overseas news: Evidence from A‐ and H‐shares in China

Shen

Wang

et al. 2020

Int. J Fin Econ

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In this paper, we investigate whether investors respond differently to news coverage from local media and overseas media relying on the special setting of A‐ and H‐cross‐listing in China. By employing the abnormal stock return variance and the abnormal trading volume as investor reaction proxies, we document that both A‐share and H‐share investors tend to have stronger reactions to their own local media than to overseas media (referred to as local media preference). To provide further support, we utilize three natural experiments, that is, the introduction of colocation by the Stock Exchange of Hong Kong, the launch of Shanghai‐Hong Kong Stock Connect, and the inclusion of A‐shares in MSCI indices as well as alternative ways to construct our main variables. In addition, we also confirm that this local media preference strengthens the market segmentation between these two share classes.

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Local bias in investor attention: Evidence from China's Internet stock message boards

Cited by 111 publications

References 23 publications

The Bounded Ending Effect in the Domain of Football Gambling: High Risks Are Not Always Preferred at the End

The Bounded Ending Effect in the Domain of Football Gambling: High Risks Are Not Always Preferred at the End

Does advertising really work?

Investor reactions to local and overseas news: Evidence from A‐ and H‐shares in China

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