EconPapers    
Economics at your fingertips  
 

Does retail trading matter to price discovery?

Tao Chen ()

German Economic Review, 2020, vol. 21, issue 4, 475-492

Abstract: The diminishing importance of retail investors and the institutionalization of markets are arguably a result of the general perception that individuals are not well informed and, hence, are better off using professional services (Davis, 2009). However, this paper provides evidence supporting the opposite. Using a global sample, we examine whether retail trading is informative around the world. Overall, retail investors are documented to enhance price efficiency by trading in the same direction as permanent price changes, contributing 24.8 % to price discovery, and accelerating the information from both scheduled and unscheduled news to be impounded into prices.

Keywords: Retail Trading; Price Discovery; Global Markets (search for similar items in EconPapers)
JEL-codes: G12 G14 G15 (search for similar items in EconPapers)
Date: 2020
References: Add references at CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
https://doi.org/10.1515/ger-2019-0041 (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

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:bpj:germec:v:21:y:2020:i:4:p:475-492:n:5

Ordering information: This journal article can be ordered from
https://www.degruyte ... ger/ger-overview.xml

DOI: 10.1515/ger-2019-0041

Access Statistics for this article

German Economic Review is currently edited by Peter Egger, Almut Balleer, Jesus Crespo-Cuaresma, Mario Larch, Aderonke Osikominu and Georg Wamser

More articles in German Economic Review from De Gruyter
Bibliographic data for series maintained by Peter Golla ().

 
Page updated 2022-11-28
Handle: RePEc:bpj:germec:v:21:y:2020:i:4:p:475-492:n:5