Happy App Happy Tip: The Return Predictability from Amusement Apps Downloads Around the World

As individual investors increasingly rely on smartphones for their daily lives, we construct a measure of real-time investor sentiment based on global amusement app downloads. We find that a one-standard-deviation increase in the last four-week amusement app downloads predicts a 47 bps increase in stock market returns in the next four weeks. We also observe a 31 bps reversal in another four weeks. Amusement app downloads are positively related to subsequent stock trading app downloads, suggesting that investor sentiment drives new stock market participation. Overall, we show that digital footprint in app downloads predicts global market returns via investor sentiment.

Keywords: Amusement Apps, Investor Sentiment, Behavioral Finance

JEL Classification: G12, G40

Suggested Citation: Suggested Citation

Lin, Tse-Chun and Liu, Yican and Lu, Fangzhou, Happy App Happy Tip: The Return Predictability from Amusement Apps Downloads Around the World (March 1, 2024). Available at SSRN: https://ssrn.com/abstract=4744745 or http://dx.doi.org/10.2139/ssrn.4744745