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The Impact of COVID-19 on the Relation Between Retail Investors' Trading and Stock Returns in the Chinese Market

Tao Bing ()
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Tao Bing: School of Finance, Capital University of Economics and Business, China

Asian Economics Letters, 2021, vol. 2, issue 1, 1-7

Abstract: This paper investigates the relation between retail investors’ flows and returns during the COVID-19 pandemic in the Chinese market using the VAR model. The results show that though the positive feedback trading during the pandemic is weaker than that in the pre-COVID-19 period, the positive feedback trading following negative returns during the crisis is much stronger than that in the pre-COVID-19 period. This implies panic trading.

Keywords: chinese stock market; positive feedback trading; retail investors; covid-19 (search for similar items in EconPapers)
JEL-codes: G15 I1 (search for similar items in EconPapers)
Date: 2021
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Asian Economics Letters is currently edited by Chun-Ping Chang (Shih Chien University, Taiwan) and Professor Chien-Chiang Lee (Nanchang University, China)

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