Arikan, Ozlem, Gozluklu, Arie, Kim, Gi and Sakaguchi, Hiroaki (2019). Primacy in Stock Market Participation:The Effect of Initial Returns on Market Re-Entry Decisions. European Journal of Finance, 25 (10), pp. 883-909.
Abstract
We examine whether initial returns influence investors’ decisions to return to the stock market following withdrawal. Using a survival analysis technique to estimate Finnish retail investors’ likelihood of stock market re-entry reveals that investors who experience lower initial returns are less likely to return, even after controlling for returns in the last month and average monthly returns for the duration of investing. This primacy effect is robust to accounting for endogeneity in investors’ exit decisions, and other behavioural biases such as recency and saliency of investment experience. Individual investors appear to be subject to primacy bias and tend to put a significant weight on initial experiences in re-entry decisions.
Publication DOI: | https://doi.org/10.1080/1351847X.2018.1459764 |
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Divisions: | College of Business and Social Sciences > Aston Business School College of Business and Social Sciences > Aston Business School > Accounting |
Additional Information: | This is an Accepted Manuscript of an article published by Taylor & Francis Group in The European Journal of Finance on 10 April 2018, available online at: http://www.tandfonline.com/10.1080/1351847X.2018.1459764 |
Uncontrolled Keywords: | Individual investor behaviour,experiential learning,primacy effect,stock market participation,stock market re-entry decision,Economics, Econometrics and Finance (miscellaneous) |
Publication ISSN: | 1466-4364 |
Last Modified: | 02 Dec 2024 08:24 |
Date Deposited: | 13 Apr 2018 12:40 |
Full Text Link: | |
Related URLs: |
https://www.tan ... 7X.2018.1459764
(Publisher URL) http://www.scop ... tnerID=8YFLogxK (Scopus URL) |
PURE Output Type: | Article |
Published Date: | 2019-07-03 |
Published Online Date: | 2018-04-11 |
Accepted Date: | 2018-03-26 |
Submitted Date: | 2017-08-22 |
Authors: |
Arikan, Ozlem
(
0000-0002-1916-2013)
Gozluklu, Arie Kim, Gi Sakaguchi, Hiroaki |