Answers are grounded in this paper and cite their sources.
Analysis of geographic influence on investor trading behavior in stock markets, indicating collective reactions to public information.
This paper analyzes the trading behavior of stock market investors. Purchases and sales are highly correlated when we divide investors geographically. Investors who live near a firm's headquarters react in a similar manner to releases of public information. We are able to make this identification by exploiting a unique feature of individual brokerage accounts in the People's Republic of China. The data allow us to pinpoint an investor's location at the time he or she places a trade. Our results are consistent with a simple, rational expectations model of heterogeneously informed investors.
No takes yet. Share an insight, caveat, or question.
Feng et al. (2004) studied this question.
Synapse has enriched 10 related papers. Consider them for comparative context: