 Is attention-based stock buying profitable? Empirical evidence from Chinese individual investorsChen Chen, Xiaomeng Lu and Yixing Zhang Pacific-Basin Finance Journal, 2023, vol. 82, issue C Abstract: We find that a noticeable fraction of investors mainly purchases attention-grabbing stocks. We define investors with such preference as attention-based buyers. Based on Survey data of Chinese individual stock investors, we find that the overall earnings of attention-based buyers decreased by about 4% compared with other investors. Employing two-stage least squares (2SLS) regression we find the OLS regression underestimates the decrease in return. Moreover, attention-based buyers are more susceptible to news and are more inclined to use online-based information as the main reference. Attention-based buyers are more speculative, and demonstrate strong disposition effect. The incapability of investing and loss in return are all attributable to these characteristics. Findings in this article are helpful to the understanding of the typical behavior bias of Chinese individual stock investors. Keywords: Attention-based buying; Individual investors; Bounded rationality (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:82:y:2023:i:c:s0927538x23001919 DOI: 10.1016/j.pacfin.2023.102120 Access Statistics for this article Pacific-Basin Finance Journal is currently edited by K. Chan and S. Ghon Rhee More articles in Pacific-Basin Finance Journal from Elsevier |
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