Broadband Internet and the Stock Market Investments of Individual Investors

Hans K. Hvide, Tom G. Meling, Magne Mogstad and Ola Vestad

No 18067, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We study the effects of broadband internet use on the investment decisions of individual investors. A public program in Norway provides plausibly exogenous variation in internet use. Our instrumental variables estimates show that internet use causes a substantial increase in stock market participation, driven primarily by increased fund ownership. Existing investors tilt their portfolios towards funds, thereby obtaining more diversified portfolios and higher Sharpe ratios, and do not increase their trading activity in stocks. Overall, access to high-speed internet seems to spur a "Democratization of finance", with individuals making investment decisions that are more in line with the advice from portfolio theory.

Keywords: Individual investors; Equity market participation (search for similar items in EconPapers)
JEL-codes: D83 G11 J2 (search for similar items in EconPapers)
Date: 2023-04
References: Add references at CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP18067 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Journal Article: Broadband Internet and the Stock Market Investments of Individual Investors (2024)
Working Paper: Broadband Internet and the Stock Market Investments of Individual Investors (2022)
Working Paper: Broadband internet and the stock market investments of individual investors (2021)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:18067

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP18067

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().