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Household investment diversification amid Covid-19 pandemic: Evidence from Chinese investors

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  • Sha, Yezhou
  • Zhang, Yong
  • Lu, Xiaomeng

Abstract

This paper finds the degree of investor's investment diversification is found to be positively correlated with confirmed cases in the city where they live. This relationship is a result of stricter quarantine policy adopted by cities hit with more severe Covid-19 outbreak, which has led to increased time for investors to trade stocks and seek advisory. In addition, the employment of investors in these cities is often negatively affected. Therefore, they tend to hold a relatively pessimistic view on expectations of future income, and thus be more cautious and risk-averse in terms of investment decisions.

Suggested Citation

  • Sha, Yezhou & Zhang, Yong & Lu, Xiaomeng, 2022. "Household investment diversification amid Covid-19 pandemic: Evidence from Chinese investors," Finance Research Letters, Elsevier, vol. 47(PA).
    • Handle: RePEc:eee:finlet:v:47:y:2022:i:pa:s1544612322001222
    DOI: 10.1016/j.frl.2022.102820
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    Cited by:

    1. Siyi Liu & Xin Liu & Chuancai Zhang & Lingli Zhang, 2023. "Institutional and individual investors' short‐term reactions to the COVID‐19 crisis in China," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(4), pages 4333-4355, December.
    2. Lu, Xiaomeng & Zhang, Xianjun & Guo, Jiaojiao & Yue, Pengpeng, 2024. "Digital finance era: Will individual investors become better players?," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 91(C).
    3. Li, Shi & Li, Meng & Fu, Rongsha, 2024. "A sustainable pandemic response: The impact of COVID-19 vaccination coverage on economic policy uncertainty," International Review of Economics & Finance, Elsevier, vol. 92(C), pages 316-332.

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