Postdoctoral Wang Xiaoxiao’s Co-authored Paper Accepted by Journal of Banking & Finance

Recently, the paper Infectious disease outbreaks and the disposition effect of mutual fund investors, written by Postdoctoral Wang Xiaoxiao from the School of Economics, Shandong University as the first author, was officially accepted by Journal of Banking & Finance, an international prestigious journal in finance. The co-author is Professor Zhang Xueyong from the School of Finance, Central University of Finance and Economics.

This paper elaborates on the potential impact of major public health emergencies on cognitive biases in the capital market. Taking the SARS epidemic in 2003 as the main event study, it focuses on analyzing the trading behavior of individual fund investors in the post-epidemic era. Using a proprietary dataset of a large domestic mutual fund company (including comprehensive trading information), the study finds that individual investors in severely affected areas show a stronger disposition effect after the epidemic. Further analysis shows that inexperienced investors are more susceptible to the disposition effect. This emotion-regulated behavior is irrational and related to behavioral bias, ultimately exacerbating investors’ financial distress. The above results are verified in multiple robustness tests.

Wang Xiaoxiao is a Key Funded Postdoctoral Fellow at the School of Economics, Shandong University. Her research fields include fund markets and corporate finance. She has published many papers in international journals such as Journal of Banking & Finance, Journal of International Money and Finance, International Review of Financial Analysis, International Review of Economics and Finance, and Pacific-Basin Finance Journal.

Link to the paper: https://doi.org/10.1016/j.jbankfin.2024.107344