Chinese lexicography and stock trading

Cui Hu and Ben G. Li

International Review of Economics & Finance, 2021, vol. 73, issue C, 44-59

Abstract: Chinese stocks with lexicographically earlier tickers are traded more frequently. Quantitatively, all else held equal, a backward change in lexicographic position by one standard deviation leads to a decrease in turnover by nearly ten percent. This lexicographic bias is heavier in the service sector and for obscure stocks. It is primarily driven by the initial character of stock tickers. Stocks switching to later lexicographic positions are penalized in trading frequency. Using alternative financial measures leads to the same findings.

Keywords: Alphabetic bias; Chinese stock market; Behavioral finance (search for similar items in EconPapers)
JEL-codes: G11 G12 G14 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:73:y:2021:i:c:p:44-59

DOI: 10.1016/j.iref.2020.12.032

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