Broadband Internet and the Stock Market Investments of Individual Investors

Hans K. Hvide, Tom G. Meling, Magne Mogstad and Ola Vestad

No 30383, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We study the effects of broadband internet use on the investment decisions of individual investors. A public program in Norway provides plausibly exogenous variation in internet use. Our instrumental variables estimates show that internet use causes a substantial increase in stock market participation, driven primarily by increased fund ownership. Existing investors tilt their portfolios towards funds, thereby obtaining more diversified portfolios and higher Sharpe ratios, and do not increase their trading activity in stocks. Overall, access to high-speed internet seems to spur a “democratization of finance”, with individuals making investment decisions that are more in line with the advice from portfolio theory.

JEL-codes: D04 D14 D15 G00 G11 G40 (search for similar items in EconPapers)
Date: 2022-08
New Economics Papers: this item is included in nep-fdg, nep-fmk, nep-ict and nep-pay
Note: AP CF
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Citations: View citations in EconPapers (5)

Published as HANS K. HVIDE & TOM G. MELING & MAGNE MOGSTAD & OLA L. VESTAD, 2024. "Broadband Internet and the Stock Market Investments of Individual Investors," The Journal of Finance, vol 79(3), pages 2163-2194.

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Related works:
Journal Article: Broadband Internet and the Stock Market Investments of Individual Investors (2024)
Working Paper: Broadband Internet and the Stock Market Investments of Individual Investors (2023)
Working Paper: Broadband internet and the stock market investments of individual investors (2021)
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