Neighbors matter: Geographical distance and trade timing in the stock market

Kȩstutis Baltakys, Margarita Baltakienė, Hannu Kärkkäinen and Juho Kanniainen

Finance Research Letters, 2019, vol. 31, issue C

Abstract: The starting point of this paper is that neighboring investors may talk to each other sharing information about their transactions in stock markets, leading to similar trading behavior. We find that pairwise trade timing similarities between investor pairs are negatively associated to geographical distance between corresponding investor pairs. This suggests that local information transfer channels between neighboring individual investors are used in decision making. We also observe that differences in age and language moderate this association. The analysis is conducted using investor level data from different regions of Finland.

Keywords: Investor trading; Geographical distance; Information transfer; Private information; Investor network; Social interactions; Behavioral finance; Behavioral economics; Social networks; Individual investors (search for similar items in EconPapers)
JEL-codes: D8 G10 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1544612318304367
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:31:y:2019:i:c:s1544612318304367

DOI: 10.1016/j.frl.2018.11.013

Access Statistics for this article

Finance Research Letters is currently edited by R. Gençay

More articles in Finance Research Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().