Trust and local bias of individual investors

Shao, Ran; Wang, Na

doi:10.1016/j.jbankfin.2021.106273

Cited by 7 publications

(4 citation statements)

References 32 publications

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“…The magnitude of local bias is similar among men and women. Shao and Wang (2021) show that local bias is higher in provinces with a larger population and a lower GDP per capita.…”

Section: Posting Sentimentmentioning

confidence: 91%

“…Third, one may worry that abnormal relative postings capture the local bias of individuals' investment portfolios. To alleviate this concern, we incorporate important regional characteristics that are related to local bias in China (e.g., Hong et al, 2014; Shao & Wang, 2021), such as the logarithm of local GDP per capita ( Log ( GDP )) and local population density ( PopDensity ). Finally, if the economy in a city heavily relies on one industry, abnormal relative postings might capture industry information rather than local information.…”

Section: Postings and Stock Returnsmentioning

confidence: 99%

“…Han et al (2022) suggest that investors are prone to self-enhancing transmission bias, making them more inclined to discuss their successful investments rather than their underperforming ones. Moreover, investors often selectively pay more attention to their investments after good news arrives (Sicherman et al, 2015). This behavior, known as the ostrich effect, can stem from a preference for optimism, a desire to maintain a positive self-image as a proficient investor, or a motivation to avoid the displeasure arising from bad news.…”

Section: Introductionmentioning

confidence: 99%

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Local information advantage and stock returns: Evidence from social media

Huang,

Li,

et al. 2024

Contemporary Accting Res

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We examine the information asymmetry between local and nonlocal investors with a large dataset of stock message board postings. We document that abnormal relative postings of a firm, i.e., unusual changes in the volume of postings from local versus nonlocal investors, capture locals' information advantage. This measure positively predicts firms' short‐term stock returns as well as those of peer firms in the same city. Sentiment analysis shows that posting activities primarily reflect good news, potentially due to social transmission bias and short‐sales constraints. We identify the information driving return predictability through content‐based analysis. Abnormal relative postings also lead analysts' forecast revisions. Overall, investors' interactions on social media contain valuable geography‐based private information.This article is protected by copyright. All rights reserved.

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“…The magnitude of local bias is similar among men and women. Shao and Wang (2021) show that local bias is higher in provinces with a larger population and a lower GDP per capita.…”

Section: Posting Sentimentmentioning

confidence: 91%

Section: Postings and Stock Returnsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Local information advantage and stock returns: Evidence from social media

Huang,

Li,

et al. 2024

Contemporary Accting Res

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“…Muslim investors in Malaysia have low product knowledge (Yusuff et al, 2020). Trust plays a vital role in investors' financial decisions, especially when they face an unfamiliar investment opportunity (Shao & Wang, 2021).…”

Section: Sources Of Information Strongly Influence Investment Decisio...mentioning

confidence: 99%

Women and Investment Decision in Sharia Instruments: Moderating Effect of Financial Spirituality Orientation

Amaroh,

Prasetyoningrum,

Husain

2024

jip

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This research is based on a gap in authority between men and women in making investment decisions where women are considered less financially literate and less struggling. Therefore, this study examines how financial literacy and trust affect women’s investment decisions in Sharia instruments with financial spirituality orientation as a moderating factor. The sample was selected from 256 women on the northeastern coast of Central Java, Indonesia. Structural Equation Modeling with a Partial Least Square method was used to test the data. The findings showed that the higher the financial literacy, trust, and financial spirituality orientation, the better the decision level in the Sharia investment decisions. The financial spirituality orientation strengthens the influence of financial literacy on Sharia investment decisions. However, financial spiritual orientation cannot intervene in trust in financial institutions. This finding suggests that women consider their spiritual beliefs while making financial decisions, but spirituality cannot nullify trust’s ability to affect Sharia investment choices. The implication is that when gender equality is acknowledged, women can get an education, work, income, and be more financially literate. The role of financial spirituality is in its mission of establishing the life-balances.

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Religion and Equity Home Bias

Liu

Lee

2023

Open Econ Rev

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Trust and local bias of individual investors

Cited by 7 publications

References 32 publications

Local information advantage and stock returns: Evidence from social media

Local information advantage and stock returns: Evidence from social media

Women and Investment Decision in Sharia Instruments: Moderating Effect of Financial Spirituality Orientation

Religion and Equity Home Bias

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