Information Sources for Investment Decisions: Evidence from Japanese Investors

Sumeet Lal, Abdul-Salam Sulemana, Trinh Xuan Thi Nguyen, Mostafa Saidur Rahim Khan () and Yoshihiko Kadoya
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Sumeet Lal: School of Economics, Hiroshima University, 1-2-1 Kagamiyama, Higashihiroshima 7398525, Japan
Abdul-Salam Sulemana: School of Economics, Hiroshima University, 1-2-1 Kagamiyama, Higashihiroshima 7398525, Japan
Trinh Xuan Thi Nguyen: School of Economics, Hiroshima University, 1-2-1 Kagamiyama, Higashihiroshima 7398525, Japan
Mostafa Saidur Rahim Khan: School of Economics, Hiroshima University, 1-2-1 Kagamiyama, Higashihiroshima 7398525, Japan

IJFS, 2023, vol. 11, issue 4, 1-18

Abstract: Although the traditional sources of financial knowledge in Japan are financial advisors and investment groups, the digital era and artificial intelligence have made other sources of information, such as social media and mass media, more influential. As such, it has become important to examine the socioeconomic, demographic, and psychological factors influencing the use of these information sources in the context of investment decisions. However, little research has been carried out to examine such associations using a large-scale nationwide dataset. We fill this gap by utilizing a dataset comprising almost 65,000 active investors from one of the largest online security companies in Japan, ensuring the representativeness and generalizability of our results. We show that active investors are more inclined to use social media and mass media than financial advisors and investment groups. The probit regression model shows that the use of each of the four sources of information is strongly shaped by an individual’s characteristics, which, to some extent, are not mutually exclusive for each source type. The study results imply that the government should regulate and monitor the quality and accuracy of the information disseminated by mass media and social media and educate investors on how to critically evaluate and verify the information that they receive.

Keywords: information sources; investment decisions; financial advisors; investment group; mass media; social media; Japan (search for similar items in EconPapers)
JEL-codes: F2 F3 F41 F42 G1 G2 G3 (search for similar items in EconPapers)
Date: 2023
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