Abstract
This study examines the impact of communication on investors’ trading frequency based on a unique dataset drawn from a Chinese social trading platform. We find robust evidence that real-account portfolio owners on the platform trade more frequently under the influence of the comments posted by their leaders (the owners of portfolios they have followed). Moreover, portfolio owners are more sensitive to the quantity than to the tone of leaders’ comments. Finally, both trading frequency and leaders’ comments negatively impact portfolio owners’ future performance. Our findings support the notion that social interaction promotes active investment strategies.
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