The geography of investor attention
- Retail investors pay over twice as much attention to local companies than non-local ones, based on Google searches. News volume and volatility amplify this attention gap. Attention appears causally related to perceived proximity: first, acquisition by a nonlocal company is associated with less attention by locals, and more by nonlocals close to the acquirer; second, COVID-19 travel restrictions correlate with a drop in relative attention to nonlocal companies, especially in locations with fewer fights after the outbreak. Finally, local attention predicts volatility, bid-ask spreads and nonlocal attention, not viceversa. These findings are consistent with local investors having an information-processing advantage.
Author: | Stefano Mengoli, Marco Pagano, Pierpaolo Pattitoni |
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URN: | urn:nbn:de:hebis:30:3-633424 |
URL: | https://ssrn.com/abstract=3983610 |
Parent Title (English): | Center for Financial Studies (Frankfurt am Main): CFS working paper series ; No. 671 |
Series (Serial Number): | CFS working paper series (671) |
Publisher: | Center for Financial Studies |
Place of publication: | Frankfurt am Main |
Document Type: | Working Paper |
Language: | English |
Year of Completion: | 2021 |
Year of first Publication: | 2021 |
Publishing Institution: | Universitätsbibliothek Johann Christian Senckenberg |
Release Date: | 2021/12/20 |
Tag: | attention; distance; liquidity; local investors; news; retail investors; volatility |
Issue: | November 21, 2021 |
Page Number: | 50 |
Note: | Marco Pagano gratefully acknowledges financial support from the Italian Ministry for University and Research (MUR) and the Einaudi Institute for Economics and Finance (EIEF). |
Institutes: | Wirtschaftswissenschaften / Wirtschaftswissenschaften |
Wissenschaftliche Zentren und koordinierte Programme / Center for Financial Studies (CFS) | |
Dewey Decimal Classification: | 3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft |
Sammlungen: | Universitätspublikationen |
Licence (German): | Deutsches Urheberrecht |