Face-to-Face or Face on Screen: Social Interactions and Mutual Fund Trading

58 Pages Posted: 19 Mar 2025

See all articles by Yi Dong

Yi Dong

Shanghai University of Finance and Economics

Lin Peng

City University of New York, Baruch College - Zicklin School of Business - Department of Economics and Finance

Lu Qiu

Hong Kong University of Science & Technology (HKUST)

Xinrong Xiao

University of International Business and Economics

Date Written: July 08, 2020

Abstract

Using a comprehensive dataset of corporate site visits, we examine the role of in-person and virtual interactions on mutual fund investment decisions. Before COVID-19, fund pairs jointly attending in-person visits exhibit significant increases in trading similarity (12.7% above mean), substantially exceeding matched controls. This effect extends to stocks unrelated to the hosting firm and strengthens with manager familiarity, similar seniority, or gender diversity. Exploiting the exogenous shift to virtual communication induced by the COVID pandemic, we find in-person visits during the pandemic continue to trigger correlated trading of unrelated stocks, while virtual visits largely do not. Our findings suggest that in-person social interactions play a critical role in information acquisition in financial markets, a function that virtual interactions cannot easily replace.

Keywords: Trading similarity, Herding, G4 Social Interactions, Trading similarity, COVID-19, Remote Work, Site Visits

JEL Classification: D83, G11, G14, G23, G4

Suggested Citation

Dong, Yi and Peng, Lin and Qiu, Lu and Xiao, Xinrong, Face-to-Face or Face on Screen: Social Interactions and Mutual Fund Trading (July 08, 2020). Available at SSRN: https://ssrn.com/abstract=5182047 or http://dx.doi.org/10.2139/ssrn.5182047

Yi Dong (Contact Author)

Shanghai University of Finance and Economics ( email )

Shanghai, Shanghai 200433
China

Lin Peng

City University of New York, Baruch College - Zicklin School of Business - Department of Economics and Finance ( email )

17 Lexington Avenue
New York, NY 10010
United States

Lu Qiu

Hong Kong University of Science & Technology (HKUST) ( email )

Xinrong Xiao

University of International Business and Economics ( email )

10 Huixindongjie, Chaoyang District
Beijing, 100029
China

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