Investors’ Financial Attention Frequency and Trading Activity
56 Pages Posted: 7 Sep 2019 Last revised: 20 Jan 2020
Date Written: October 12, 2019
Based on data on users’ daily adoption of securities service mobile applications, we measure investors’ financial attention frequency, which reflects how often they use such apps, to obtain information on their frequency of opening these apps and online duration. We find that financial attention frequency shows a clear ostrich effect, suggesting that investors acquire financial information less frequently following periods of low market returns and high market volatility. In addition, it significantly promotes trading activity in the market. Further, this driving force remains after a series of robustness tests controlling for other market factors such as investor attention and sentiment and after addressing endogeneity concerns. Finally, financial attention frequency also increases individuals’ net buying transactions.
Keywords: Securities Service Mobile Applications; Financial Attention Frequency; Ostrich Effect; Trading
JEL Classification: G12; G14
Suggested Citation: Suggested Citation