Abstract

http://ssrn.com/abstract=2373097
 


 



Does Diversity Lead to Diverse Opinions? Evidence from Languages and Stock Markets


Yen-Cheng Chang


Shanghai Advanced Institute of Finance, Shanghai Jiao Tong University; China Academy of Financial Research (CAFR)

Harrison G. Hong


Princeton University - Department of Economics; National Bureau of Economic Research (NBER)

Larissa Tiedens


Stanford Graduate School of Business

Na Wang


Hofstra University - Frank G. Zarb School of Business

Bin Zhao


Shanghai Advanced Institute of Finance; Shanghai Jiao Tong University (SJTU); China Academy of Financial Research (CAFR)

June 15, 2014

Rock Center for Corporate Governance at Stanford University Working Paper No. 168
Stanford University Graduate School of Business Research Paper No. 13-16

Abstract:     
Diversity, whether ethnic, religious or linguistic, is often thought to stimulate diverse opinions and activity. We test whether this is the case using linguistic measures of diversity across Chinese provinces and cities and stock market measures of the diversity of opinions and trading activity. Using the geographical isolation of an area due to hilly terrain as an instrument for linguistic diversity, we find that households living in more diverse areas indeed have more diverse opinions as measured by greater disagreement on stock message boards and are also more active stock traders. We then discriminate in favor of a diversity-stimulates explanation for our findings and against the diversity-separates view of slow news diffusion due to language barriers.

Number of Pages in PDF File: 49

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Date posted: January 1, 2014 ; Last revised: June 19, 2014

Suggested Citation

Chang, Yen-Cheng and Hong, Harrison G. and Tiedens, Larissa and Wang, Na and Zhao, Bin, Does Diversity Lead to Diverse Opinions? Evidence from Languages and Stock Markets (June 15, 2014). Rock Center for Corporate Governance at Stanford University Working Paper No. 168; Stanford University Graduate School of Business Research Paper No. 13-16. Available at SSRN: http://ssrn.com/abstract=2373097 or http://dx.doi.org/10.2139/ssrn.2373097

Contact Information

Yen-Cheng Chang (Contact Author)
Shanghai Advanced Institute of Finance, Shanghai Jiao Tong University ( email )
211 West Huaihai Road
Shanghai, 200030
China
China Academy of Financial Research (CAFR)
211 West Huaihai Road
Shanghai, 200030
China

Harrison G. Hong
Princeton University - Department of Economics ( email )
Princeton, NJ 08544-1021
United States
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Larissa Tiedens
Stanford Graduate School of Business ( email )
518 Memorial Way
Stanford, CA 94305-5015
United States
Na Wang
Hofstra University - Frank G. Zarb School of Business ( email )
134 Hofstra University
Hempstead, NY 11549
United States
Bin Zhao
Shanghai Advanced Institute of Finance ( email )
211 West Huaihai Road
Shanghai, 200030
China
Shanghai Jiao Tong University (SJTU) ( email )
KoGuan Law School
Shanghai 200030, Shanghai 200052
China
China Academy of Financial Research (CAFR) ( email )
1954 Huashan Road
Shanghai P.R.China, 200030
China
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