Financial knowledge acquisition and trading behavior: empirical evidence from an online information tool

Anthony Bellofatto, Marie-Hélène Broihanne and Catherine D’Hondt ()
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Anthony Bellofatto: Arvestar Asset Management
Marie-Hélène Broihanne: University of Strasbourg
Catherine D’Hondt: Louvain Finance (LIDAM), Louvain School of Management - UCLouvain

Financial Markets and Portfolio Management, 2025, vol. 39, issue 1, No 1, 45 pages

Abstract: Abstract Using the advent of the MiFID regulation in Europe, we conduct a robust quasi-natural experiment in a large sample of retail investors to analyze how some of them changed their trading behavior after being granted access to an online information tool. Focusing on investors who asked for the information tool, we find that subjective financial literacy and education are both positively related to financial knowledge acquisition, as suggested in Lusardi et al. (2017)′s model. Using propensity score matched difference-in-differences regressions, we show that financial knowledge acquisition has mixed effects on trading behavior: better portfolio diversification but higher trading intensity and lower net returns. Our empirical evidence indicates financial knowledge acquisition being complementary to financial literacy (instead of a substitute). It also reveals that the investment profile does matter to explain heterogeneity in behavior across investors.

Keywords: Retail investors; Financial knowledge acquisition; MiFID (search for similar items in EconPapers)
JEL-codes: D14 D83 G11 G28 G40 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s11408-024-00459-0

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