Regulatory Reference And Investor's Information Seeking

With the promotion of financial system reform and the improvement of financial internationalization,the scale of China's financial market continues to expand,the market structure is more optimized,and the market participation is constantly improving.Correspondingly,the academical exploration of financial market continues in a deep-going way and the field of behavioral finance has become a hot topic.However,the research on information disclosure,investor behavior and government supervision are rare in this field,and thus a certain space for exploration still exists.Based on current foreign research on advertisement content of financial products,this paper combines the three branches of behavioral finance mentioned above and explores the effect of regulatory reference on information seeking behavior of investors.Theoretically,the paper analyses the mechanism through which three forms of regulatory reference(textual regulatory reference,textual regulatory reference with logo,regulatory logo)influence the information seeking behavior on three aspects of information(shrouded content in the advertisement,extra information outside the advertisement,features of financial product outside the advertisement)has been discussed respectively.Besides,several groups are formed by categories of financial product and by psychological characteristics of investors,so as to compare the endorsement effect of regulatory reference between groups.Empirically,a survey experiment of bond fund investment is conducted to collect data,then multiple OLS linear regression model,Logit regression model and difference-in-difference model are applied to full sample analysis,subsample analysis and inner-subject switching behavior analysis.Robustness is also discussed after regression.The conclusions are as follows.First,regulatory reference has no effect on investors'demand for shrouded information in the advertisement,nor does it change the total demand for information outside the advertisement,but it does change the demand for certain information types.Second.no evidence suggests the overall endorsement effect of regulatory reference differ between fund types,whereas this effect on certain information types is stronger on pure bond fund compared to partial bond fund.Third,trust on regulatory authorities and self-confidence are two critical psychological characteristics to affect the endorsement effect.In most cases,higher level of these two characteristics assists regulatory reference to play a role.Finally,for the same investor,graphical regulatory reference can trigger switching behavior on the demand for information types,while other forms of regulatory reference do not work.On account of above conclusions,three related policy recommendations are put forward.First,prudently approve the use of CSRC approval on promotional materials of funds.Second,prepare differential regulatory rules on promotional materials for difference types of funds.Third,provide different reminders for individual investors according to their characteristics.