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Stock investments at work

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  • Hvide, Hans K.
  • Östberg, Per

Abstract

Stock market investment decisions of individuals are positively correlated with that of co-workers. Sorting of unobservably similar individuals to the same workplaces is unlikely to explain our results, as evidenced by the investment behavior of individuals that move between plants. Purchases made under stronger co-worker purchase activity are not associated with higher returns. Moreover, social interaction appears to drive the purchase of within-industry stocks; an investment mistake. Overall, our results suggest a strong influence of co-workers on investment choices, but not an influence that improves the quality of investment decisions.

Suggested Citation

  • Hvide, Hans K. & Östberg, Per, 2014. "Stock investments at work," CEPR Discussion Papers 9837, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:9837
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    More about this item

    Keywords

    Individual investors; Investment decisions; Peer effect; Social interaction; Stock selection;
    All these keywords.

    JEL classification:

    • G02 - Financial Economics - - General - - - Behavioral Finance: Underlying Principles
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • J00 - Labor and Demographic Economics - - General - - - General

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