The impact of psychological identification with home-name stocks on investor behavior: an empirical and experimental investigation

  • Haizhong Wang
  • Hong Yuan
  • Xiaolin LiEmail author
  • Huaxi Li
Original Empirical Research


The objective of this paper is to examine whether including words that associate a stock name with a country name might influence investor behavior and stock returns. Across three studies, we collect and analyze both stock market data and individual-level experimental data to show the effect of home-name effect on investors’ behavior and stock market performance. Using stock trading records, Study 1 shows that home-name stocks significantly outperform non–home-name stocks in emerging Chinese stock markets dominated by retail investors. We replicate this home-name effect on individual Chinese investors in randomized experiments (Studies 2 and 3) and further test the underlying psychological process by exploring the mediating effect of investor firm psychological identification. We find that associations with the home country name lead to stronger investor psychological identification with the firm and higher investment intentions, and that this effect is much stronger when investors are motivated to self-enhance. Together, these studies inform firms’ stock naming strategies and provide guidance for financial advising by demonstrating the crucial role of identification in financial decision making.


Stock names Psychological identification Investment behavior Self-enhancement motives Emerging markets China 



The authors would like to acknowledge the financial support by the Key Program of National Natural Science Foundation of China (NO. 71832015) and the General Program of National Natural Science Foundation of China (NO.71572207).

Supplementary material

11747_2019_677_MOESM1_ESM.docx (18 kb)
ESM 1 (DOCX 18 kb)


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© Academy of Marketing Science 2019

Authors and Affiliations

  1. 1.The School of ManagementSun Yat-sen UniversityGuangzhouChina
  2. 2.Lundquist College of BusinessUniversity of OregonEugeneUSA
  3. 3.Guangdong University of Finance and EconomicsGuangzhouPeople’s Republic of China
  4. 4.The School of ManagementSun Yat-sen UniversityGuangzhouChina

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