Background Noise? TV Advertising Affects Real Time Investor Behavior

60 Pages Posted: 1 Mar 2019 Last revised: 24 Apr 2019

See all articles by Jura Liaukonyte

Jura Liaukonyte

Cornell University

Alminas Zaldokas

Hong Kong University of Science & Technology (HKUST) - Department of Finance

Date Written: February 17, 2019

Abstract

Using minute-by-minute data, we study the real-time effects of TV advertising on retail investor search for financial information and their subsequent trading activity. Our identification strategy exploits the fact that viewers in different U.S. time zones are exposed to the same national advertising at different times, allowing us to control for contemporaneous confounding events. We find that an average ad leads to a 3% increase in SEC EDGAR queries within 15 minutes of the ad’s airing. The ad-induced queries on the advertiser increase trading volume and contribute to a temporary rise in the stock price.

Keywords: Advertising; Limited Attention; Retail Investor Behavior

JEL Classification: G11, G12, L15, M37

Suggested Citation

Liaukonyte, Jura and Zaldokas, Alminas, Background Noise? TV Advertising Affects Real Time Investor Behavior (February 17, 2019). Available at SSRN: https://ssrn.com/abstract=3336176 or http://dx.doi.org/10.2139/ssrn.3336176

Jura Liaukonyte

Cornell University ( email )

347 Warren Hall
Ithaca, NY 14853
United States

Alminas Zaldokas (Contact Author)

Hong Kong University of Science & Technology (HKUST) - Department of Finance ( email )

Clear Water Bay, Kowloon
Hong Kong

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