Amid the turbulence in stock markets, retail investors continue to look for investment ideas. With thousands of publicly-traded stocks available, many retail investors often resort to their recent personal experiences when deciding on which stocks to buy or sell. Maybe a surge in video conferencing or home deliveries will prompt them to invest in companies involved in those businesses. They could even be inspired by ads they see on TV.
In this seminar, Professor Žaldokas will share his insights on the effects of advertising on investor behavior and stock prices. There is a predictable, recurring, and robust pattern between investor exposure to television commercials and subsequent retail stock trading. An example in Professor Žaldokas’s recent research study showed that within 15 minutes of seeing an ad for a firm’s product or service, investors begin searching for financial information on that firm’s stock. This surge of attention leads to a higher trading volume of the advertiser’s stock the following day – and contributes to a temporary rise in the stock price of that firm. The effects of advertising on investor behavior and stock prices are indeed more far reaching than people previously believed.
Professor Alminas Žaldokas is an Associate Professor of Finance at the HKUST. He has joined HKUST in 2012 after receiving his Ph.D. in Finance from INSEAD (France). As the visiting scholar, he has also taught at the McCombs School of Business at the University of Texas in Austin.
Professor Žaldokas’s research focuses on the interaction between firm decisions in the financial and in the product markets. His research papers have been published in the leading academic journals such as the Journal of Financial Economics, Review of Financial Studies, Management Science, Journal of Accounting Research, RAND Journal of Economics, and Journal of International Economics. His recent work on collusion in product markets has received multiple academic and practitioner awards and has been presented in the conferences organized by the policy makers such as the Securities Exchange Commission (SEC) and Federal Trade Commission (FTC).
Seminar Schedule (Hong Kong time)
19:15 Welcome and Introduction
20:15 Q & A