No. 25: COVID-19 and investor behavior

Year: 2020

Type: Working Paper

Open Science:

Bronze

Abstract

How do retail investors respond to the outbreak of COVID-19? We use transaction-level trading data to show that investors significantly increase their trading activities as the COVID-19 pandemic unfolds, both at the extensive and at the intensive margin. The average weekly trading intensity increases by 13.9% as the number of COVID-19 cases doubles. The increase in trading is especially pronounced for male and older investors, and affects stock and index trading. Following the 9.99%-drop of the Dow Jones Industrial Average on March 12, investors significantly reduce the usage of leverage across all asset classes.

Publication Information

TRR 266 researchers

Regina Ortmann Bielefeld University

Regina Ortmann is Professor for Controlling and Business Taxation at Bielefeld University. Before she was a Junior Professor for International Business Taxation at Paderborn University. She is member of the American Accounting Association, European Accounting Association, Center for Tax and Accounting Research (CETAR), German Economic Association of Business Administration (GEABA) and affiliated member at the Norwegian Center for Taxation (NoCeT).

Matthias Pelster

External researchers

Sascha Tobias Wengerek

DOI

DOI Link

Open Science

To cite this article

Ortmann, R., Pelster, M., & Wengerek, S. T. (2020). COVID-19 and investor behavior. TRR 266 Accounting for Transparency Working Paper Series No. 25. https://dx.doi.org/10.2139/ssrn.3589443

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Participating Institutions

TRR 266‘s main locations are Paderborn University (Coordinating University), HU Berlin, and University of Mannheim. All three locations have been centers for accounting and tax research for many years. They are joined by researchers from LMU Munich, Frankfurt School of Finance and Management, Goethe University Frankfurt, University of Cologne and Leibniz University Hannover who share the same research agenda.