The impact of psychological identification with home-name stocks on investor behavior: an empirical and experimental investigation

Haizhong Wang (), Hong Yuan (), Xiaolin Li () and Huaxi Li
Additional contact information
Haizhong Wang: Sun Yat-sen University
Hong Yuan: University of Oregon
Xiaolin Li: Guangdong University of Finance and Economics
Huaxi Li: Sun Yat-sen University

Journal of the Academy of Marketing Science, 2019, vol. 47, issue 6, No 8, 1109-1130

Abstract: Abstract The objective of this paper is to examine whether including words that associate a stock name with a country name might influence investor behavior and stock returns. Across three studies, we collect and analyze both stock market data and individual-level experimental data to show the effect of home-name effect on investors’ behavior and stock market performance. Using stock trading records, Study 1 shows that home-name stocks significantly outperform non–home-name stocks in emerging Chinese stock markets dominated by retail investors. We replicate this home-name effect on individual Chinese investors in randomized experiments (Studies 2 and 3) and further test the underlying psychological process by exploring the mediating effect of investor firm psychological identification. We find that associations with the home country name lead to stronger investor psychological identification with the firm and higher investment intentions, and that this effect is much stronger when investors are motivated to self-enhance. Together, these studies inform firms’ stock naming strategies and provide guidance for financial advising by demonstrating the crucial role of identification in financial decision making.

Keywords: Stock names; Psychological identification; Investment behavior; Self-enhancement motives; Emerging markets; China (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
http://link.springer.com/10.1007/s11747-019-00677-3 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

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:spr:joamsc:v:47:y:2019:i:6:d:10.1007_s11747-019-00677-3

Ordering information: This journal article can be ordered from
https://www.springer ... gement/journal/11747

DOI: 10.1007/s11747-019-00677-3

Access Statistics for this article

Journal of the Academy of Marketing Science is currently edited by John Hulland, Anne Hoekman and Mark Houston

More articles in Journal of the Academy of Marketing Science from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().