Do Risk Preferences Shape the Effect of Online Trading on Trading Frequency, Volume, and Portfolio Performance?

• 成果类型: Article
• 署名作者: Pan, Yang; Mithas, Sunil; Hsieh, J. J. Po-An; Liu, Che-Wei
• 署名单位: Tulane University; State University System of Florida; University of South Florida; University System of Georgia; Georgia State University; Indiana University System; Indiana University Bloomington; IU Kelley School of Business; State University System of Florida; University of South Florida
• 刊物名称: JOURNAL OF MANAGEMENT INFORMATION SYSTEMS
• ISSN/ISSBN: 0742-1222
• DOI: 10.1080/07421222.2023.2196777
• 发表日期: 2023
• 页码: 440-469
• 关键词: information-technology; customer satisfaction; Distribution channels; Confirmation bias; firm performance; decision-making; confidence; INNOVATION; narcissism; investors

摘要

How do investors' risk preferences influence the relationships between investors' online channel use intensity and both their trading behaviors and performance? This study answers this important question even as investors are increasingly rely on the Internet for their trading activities. We leverage rare and unique micro-level historical dataset from more than 7,000 investor accounts over a 44-month period between 2010 and 2013 at a large brokerage firm in China. The dataset and analyses enable us to provide new insights into how investors' online channel use intensity and risk preferences jointly influence their trading behaviors and performance, even though some other aspects of financial markets have changed considerably over the years. The findings reveal that although online channel use intensity is associated with increased trading volume, trading frequency, and investment returns, these effects differ across investors with different risk preferences. We find that while online channel use intensity has strong positive effects on transaction frequency for both risk-seeking and risk-averse investors, it has a much lower effect on trading volume for risk-averse investors than for risk-seeking investors. We further find that risk-averse investors with higher online channel use intensity outperform investors with other risk preferences in terms of investment performance. This paper contributes to the emerging literature at the intersection of information systems and behavioral finance by revealing the moderating role of risk preferences in the relationships between investors' online trading channel use intensity and both their trading behaviors and outcomes. We discuss the implications for research and practice.