20/07/2021 - 11:18

The editorial board of the Brazilian Review of Finance (RBFin) elected the best article published in 2020.

Prize: 10,000.00 BRL 

More information: https://bibliotecadigital.fgv.br/ojs/index.php/rbfin/index 
 

Winner

Attention-grabbing stocks and the behavior of individual investors in Brazil
Fernando Chague, Bruno Giovannetti e Anthony Silva
 

Abstract: This study complements the existing literature on investor attention with three empirical findings. First, we show that low-activity individual investors are net buyers of stocks appearing on the headlines of news stories that convey no meaningful information about future returns. Second, we document that this buying pressure of some individuals following purely attention-grabbing articles leads to higher short-term returns. Finally, we provide evidence that investors who are more prone to purchase stocks after irrelevant news have poorer stock-picking performance. We hypothesize that individuals tend to narrow their choice set to alternatives that attract attention. Taken together, our findings suggest that the media, just by making some firms more salient, plays an important role in the allocation of individual investors' attention in investment activities.

 

Honorable mention

Why is bank credit in Brazil the most expensive in the world?
Rodrigo Zeidan
 

Abstract: The article reviews the scientific literature about the determinants of credit spreads in Brazil. Econometric evidence shows that market concentration, a proxy for (un)competitive behavior, is statistically significant for all studies surveyed. We posit that that higher concentration is part of a well-defined strategy by the Brazilian Central Bank that favors prudence over efficiency. Other variables that help explain why spread in Brazil is among the highest in the world include market microstructure, operating costs, credit risk, opportunity costs, managerial quality, nominal interest rates (SELIC), market concentration, interest rate volatility, earmarked credit, and GDP.