What Determines How Often Retail Investors Trade? Evidence from Field Research in China

DOI

10.2991/aebmr.k.220307.009How to use a DOI?

Keywords

Retail Investor Trade; OLS Regression Analysis; Control Variable; Transaction Risk and Frequency

Abstract

Retail investors’ heavy transactions, which are connected with the “herd effect,” have a detrimental influence on individual return rates and market volatility. It is well observed that Chinese investors have more frequent trading behavior than investors from western countries. This study aims to testify the key determinants of their trading frequency based on their personalities and evaluation of the market. In this context, social and biological features include factors such as age, gender, educational attainment, and total assets, whereas attitude refers to investors’ assessment of and confidence in risky investments. Specifically, it investigates how retail investors’ biological and sociological traits, as well as their attitude toward the investment market, influence their trading frequency. To test the hypothesis, an online survey and interviews were distributed to 177 retail investors by a Chinese scholar. This study uses correlation coefficient analysis to find the associated factors in his primary data: gender, stock investing period, and risk preference are the most important correlated variables. The research then analyzes the degree of correlation of each variable using the OLS regression model. The findings imply that males trade more frequently than women; the deeper an investor’s investment in stock, the simpler it is for them to execute stock transactions; and the more risk they take in stock, the more frequent stock transactions are likely to occur among retail investors.

Copyright

© 2022 The Authors. Published by Atlantis Press International B.V.

Open Access

This is an open access article under the CC BY-NC license.

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TY  - CONF
AU  - Fuxin Tian
PY  - 2022
DA  - 2022/03/26
TI  - What Determines How Often Retail Investors Trade? Evidence from Field Research in China
BT  - Proceedings of the 2022 7th International Conference on Financial Innovation and Economic Development (ICFIED 2022)
PB  - Atlantis Press
SP  - 51
EP  - 56
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.220307.009
DO  - 10.2991/aebmr.k.220307.009
ID  - Tian2022
ER  -