Local bias in investor attention: Evidence from China's Internet stock message boards

• New measurement of investor attention is proposed.
• We find local bias in individual investor attention.
• Local bias of investor attention is strong in underdeveloped regions.
• Local bias of investor attention is strong for large, non-SCI 300, low-turnover and local-name stocks.
• The marginal effect of local bias is much stronger for distances within 500 km.

In contrast to studies that focus on investment accounts, this study examines local bias in investor attention by analyzing messages posted by investors on China's Internet stock message boards. We find that individual investors pay more attention to stocks of local companies than to those of nonlocal companies. Local bias is particularly strong in underdeveloped regions, toward large, non-CSI 300, and low-turnover stocks and toward stocks with names that indicate their localities. The marginal effect of local bias is also considerably strong for distances within 500 km. (G10; G11; G14; G15).