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The Geography of Investor Attention

Stefano Mengoli, Marco Pagano () and Pierpaolo Pattitoni ()

No 2114, EIEF Working Papers Series from Einaudi Institute for Economics and Finance (EIEF)

Abstract: Retail investors pay over twice as much attention to local companies than non-local ones, based on Google searches. News volume and volatility amplify this attention gap. Attention appears causally related to perceived proximity: first, acquisition by a nonlocal company is associated with less attention by locals, and more by nonlocals close to the acquirer; second, COVID-19 travel restrictions correlate with a drop in relative attention to nonlocal companies, especially in locations with fewer flights after the outbreak. Finally, local attention predicts volatility, bid-ask spreads and nonlocal attention, not viceversa. These findings are consistent with local investors having an information-processing advantage.

Pages: 47 pages
Date: 2021, Revised 2021-11
New Economics Papers: this item is included in nep-cwa, nep-mst and nep-ure
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Related works:
Working Paper: The Geography of Investor Attention (2021) Downloads
Working Paper: The Geography of Investor Attention (2021) Downloads
Working Paper: The geography of investor attention (2021) Downloads
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