Social Trust and Differential Reactions of Local and Foreign Investors to Public News / Chunxin Jia, Yaping Wang, Wei Xiong.

Format:

Book

Author/Creator:

Jia, Chunxin.

Contributor:

National Bureau of Economic Research.

Wang, Yaping.

Xiong, Wei.

Series:

Working Paper Series (National Bureau of Economic Research) no. w21075.

NBER working paper series no. w21075

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2015.

Summary:

This paper uses the segmented dual-class shares issued by several dozen Chinese firms---A shares to local Chinese investors and H shares to foreign investors---to compare reactions of local and foreign investors to the same public news. We find that local investors react more strongly to earnings forecasts by local analysts, while foreign investors react more strongly to forecasts of foreign analysts. This finding highlights social trust as a force driving people with different social backgrounds to react differently to the same information.

Notes:

Print version record

April 2015.