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Investors’ financial attention frequency and trading activity

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  • Cai, Wenwu
  • Lu, Jing

Abstract

Based on data on users' daily adoption of securities service mobile applications, we measure investors' financial attention frequency, which reflects how often they use such apps, to obtain information on their frequency of opening these apps and online duration. We find that financial attention frequency shows a clear ostrich effect, suggesting that investors acquire financial information less frequently following periods of low market returns and high market volatility. In addition, it significantly promotes trading activity in the market. Further, this driving force remains after a series of robustness tests controlling for other market factors such as investor attention and sentiment and after addressing endogeneity concerns. Finally, financial attention frequency also increases individuals' net buying transactions.

Suggested Citation

  • Cai, Wenwu & Lu, Jing, 2019. "Investors’ financial attention frequency and trading activity," Pacific-Basin Finance Journal, Elsevier, vol. 58(C).
    • Handle: RePEc:eee:pacfin:v:58:y:2019:i:c:s0927538x19301684
    DOI: 10.1016/j.pacfin.2019.101239
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    More about this item

    Keywords

    Securities service mobile applications; Financial attention frequency; Ostrich effect; Trading;
    All these keywords.

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading

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