Will Watching Romantic Comedy Boost A-Share Stock Prices?

In recent years,the vigorous development of China’s film market has provided a substantial data basis for us to combine the film market with other fields.According to the existing psychological literature,specific types of films can induce the audience to produce corresponding emotions,and then affect their subsequent decision-making behavior.If the above conclusions are applied to investors,it makes people wonder,if investors go into the cinema to watch certain types of movies and produce corresponding positive emotions,this positive emotion will affect their trading behavior in the stock market,and then affect the stock price?That is,whether there is the possibility that the viewing behavior affects the stock pricing.Based on this,this paper defines romantic comedy [romantic comedy(Romantic comedy)is defined as a film that satisfies both comedy type and romantic type,and its detailed definition can be found in Section 2.4 of this article.].As a surrogate variable of positive emotion,the number of moviegoers is used to study the relationship between positive emotion and stock market return.This study overcomes the shortcomings of previous psychological experiments that most of the subjects are college students with a small sample size,and provides a psychological micro-basis for the common lack of psychological basis in the behavioral finance literature.Specifically,this paper uses a multivariate progressive time series model to study the impact of investor positive sentiment caused by movie-watching behavior(the number of people watching romantic comedies on the previous day as a proxy variable)on the return of A-share stocks the next day.The results show that investors’ positive emotions caused by watching romantic comedies do cause investors to overbuy and have a positive impact on A-share returns the next day.this is consistent with the existing psychological and behavioral finance literature on positive emotion and decision-making behavior.At the same time,in order to control the endogenous problems caused by direct economic effects,some short-term shocks and some unobservable missing variables,this paper uses the total number of people watching movies as a tool variable.The results of both linear regression and 2SLS regression show that the results of this paper are robust and non-endogenous.