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Peer Effects in the Trading Decisions of Individual Investors

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Listed:
  • Lilian Ng
  • Fei Wu

Abstract

"This study examines for evidence of peer effects in the trading decisions of individual investors from Mainland China, a country whose cultural and social structures are vastly different from those of Western countries. Cultural differences, as widely documented, play a significant role in social interactions and word-of-mouth behavior. In contrast to US studies, we find robust evidence that the trading decisions of Chinese investors are influenced, via word of mouth, by those of their peers who maintain brokerage accounts at the same branch, but not by those whose accounts are maintained at another branch located in the same city." Copyright (c) 2010 Financial Management Association International.

Suggested Citation

  • Lilian Ng & Fei Wu, 2010. "Peer Effects in the Trading Decisions of Individual Investors," Financial Management, Financial Management Association International, vol. 39(2), pages 807-831, June.
  • Handle: RePEc:bla:finmgt:v:39:y:2010:i:2:p:807-831
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    File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.1755-053X.2010.01093.x
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    Cited by:

    1. repec:eee:pacfin:v:46:y:2017:i:pb:p:323-336 is not listed on IDEAS
    2. Wenlian Gao & Lilian Ng & Qinghai Wang, 2011. "Does Corporate Headquarters Location Matter for Firm Capital Structure?," Financial Management, Financial Management Association International, vol. 40(1), pages 113-138, March.
    3. Kelley Bergsma & Danling Jiang, 2016. "Cultural New Year Holidays and Stock Returns around the World," Financial Management, Financial Management Association International, vol. 45(1), pages 3-35, March.
    4. Néstor Gandelman & Ana Balsa & Nicolás González, 2012. "Peer Effects in Risk Aversion," Development Research Working Paper Series 11/2012, Institute for Advanced Development Studies.
    5. Wen-Lin Wu & Yin-Feng Gau, 2017. "Home bias in portfolio choices: social learning among partially informed agents," Review of Quantitative Finance and Accounting, Springer, vol. 48(2), pages 527-556, February.
    6. repec:eee:jeborg:v:140:y:2017:i:c:p:197-223 is not listed on IDEAS
    7. Wang, Qin & Zhang, Jun, 2015. "Does individual investor trading impact firm valuation?," Journal of Corporate Finance, Elsevier, vol. 35(C), pages 120-135.

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