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The Geography of Investor Attention

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

CSEF Working Papers from Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy

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 ights 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.

Keywords: attention; retail investors; local investors; distance; news; liquidity; volatility. (search for similar items in EconPapers)
JEL-codes: D83 G11 G12 G14 G50 L86 R32 (search for similar items in EconPapers)
Date: 2021-11-22
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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