Arbeitspapier
The trading response of individual investors to local bankruptcies
We use data from a German online brokerage and a survey to show that retail investors sharply reduce risk-taking in response to nearby firm bankruptcies, which are not predictive of returns. The e.ects on trading are spatially highly concentrated, immediate and not persistent. They seem to operate through more pessimistic expected returns and increased risk aversion and do not reflect wealth e.ects or changes in background risks. Investors learn about bankruptcies through immediate coverage in local newspapers. Our findings suggest that non-informative local experiences that make downside risks of stock investment more salient contribute to idiosyncratic short-term fluctuations in trading.
- Sprache
-
Englisch
- Erschienen in
-
Series: SAFE Working Paper ; No. 272
- Klassifikation
-
Wirtschaft
Household Saving; Personal Finance
Portfolio Choice; Investment Decisions
- Thema
-
Individual investors
risk-taking
trading
experiences
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Laudenbach, Christine
Loos, Benjamin
Pirschel, Jenny
Wohlfart, Johannes
- Ereignis
-
Veröffentlichung
- (wer)
-
Leibniz Institute for Financial Research SAFE
- (wo)
-
Frankfurt a. M.
- (wann)
-
2020
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:43 MEZ
Datenpartner
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Laudenbach, Christine
- Loos, Benjamin
- Pirschel, Jenny
- Wohlfart, Johannes
- Leibniz Institute for Financial Research SAFE
Entstanden
- 2020