TY  - UNPD
A1  - Laudenbach, Christine
A1  - Loos, Benjamin
A1  - Pirschel, Jenny
A1  - Wohlfart, Johannes
T1  - The trading response of individual investors to local bankruptcies
T2  - SAFE working paper series ; No. 272
N2  - We use data from a German online brokerage and a survey to show that retail investors sharply reduce risk-taking in response to nearby firm bankruptcies, which are not pre- dictive of returns. The effects on trading are spatially highly concentrated, immediate and not persistent. They seem to operate through more pessimistic expected returns and increased risk aversion and do not reflect wealth effects or changes in background risks. Investors learn about bankruptcies through immediate coverage in local newspapers. Our findings suggest that non-informative local experiences that make downside risks of stock investment more salient contribute to idiosyncratic short-term fluctuations in trading.
T3  - SAFE working paper - 272 
KW  - Individual investors
KW  - risk-taking
KW  - trading
KW  - experiences
Y1  - 2020
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/53373
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30:3-533738
UR  - https://ssrn.com/abstract=3560944
IS  - March 20, 2020
PB  - SAFE
CY  - Frankfurt am Main
ER  -