Does Investors’ Online Public Opinion Divergence Increase the Trading Volume? Evidence from the CSI 300 Index Constituents

Abstract

We collected online public opinions on the CSI 300 index constituents and investigated the different impacts of online public opinion divergence on trading volume. Here, we find that online public opinions are helpful in improving the trading volume, but the online public opinion divergence of investors reduces the expected trading volume. In particular, non-financial and mid-cap stocks with high levels of discussion are more significantly influenced by online public opinion divergence. Through the classification of investors’ influence levels, we find that the divergence among high-level investors increases the trading volume, while the divergence among low-level investors exacerbates the decrease in trading volume. A reduction in divergence for both levels will have a greater impact. We believe that attention should be paid to regulating and guiding the online public opinions of “newcomers”. This will not only improve the quality of Guba but also contribute to the steady development of the Chinese stock market.