Investors’ financial attention frequency and trading activity

Wenwu Cai and Jing Lu

Pacific-Basin Finance Journal, 2019, vol. 58, issue C

Abstract: Based on data on users' daily adoption of securities service mobile applications, we measure investors' financial attention frequency, which reflects how often they use such apps, to obtain information on their frequency of opening these apps and online duration. We find that financial attention frequency shows a clear ostrich effect, suggesting that investors acquire financial information less frequently following periods of low market returns and high market volatility. In addition, it significantly promotes trading activity in the market. Further, this driving force remains after a series of robustness tests controlling for other market factors such as investor attention and sentiment and after addressing endogeneity concerns. Finally, financial attention frequency also increases individuals' net buying transactions.

Keywords: Securities service mobile applications; Financial attention frequency; Ostrich effect; Trading (search for similar items in EconPapers)
JEL-codes: G12 G14 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:58:y:2019:i:c:s0927538x19301684

DOI: 10.1016/j.pacfin.2019.101239

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