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Chinese lexicography and stock trading

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  • Hu, Cui
  • Li, Ben G.

Abstract

Chinese stocks with lexicographically earlier tickers are traded more frequently. Quantitatively, all else held equal, a backward change in lexicographic position by one standard deviation leads to a decrease in turnover by nearly ten percent. This lexicographic bias is heavier in the service sector and for obscure stocks. It is primarily driven by the initial character of stock tickers. Stocks switching to later lexicographic positions are penalized in trading frequency. Using alternative financial measures leads to the same findings.

Suggested Citation

  • Hu, Cui & Li, Ben G., 2021. "Chinese lexicography and stock trading," International Review of Economics & Finance, Elsevier, vol. 73(C), pages 44-59.
    • Handle: RePEc:eee:reveco:v:73:y:2021:i:c:p:44-59
    DOI: 10.1016/j.iref.2020.12.032
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    References listed on IDEAS

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    More about this item

    Keywords

    Alphabetic bias; Chinese stock market; Behavioral finance;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • 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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