Disentangling the Effects of Geographic Proximity on Forex Social Trading Platforms

Mengli Yu; Yijing Li; Eric T.K. Lim; Chee-Wee Tan

Disentangling the Effects of Geographic Proximity on Forex Social Trading Platforms

Mengli Yu, Yijing Li, Eric T.K. Lim, Chee-Wee Tan

Department of Digitalization

University of New South Wales

Research output: Chapter in Book/Report/Conference proceeding › Article in proceedings › Research › peer-review

Abstract

Forex social trading is a nascent financial innovation that endows investors with opportunities to speculate on global currencies online by following and emulating investment strategies from savvy traders. Although social trading has been touted as a means of lowering distance barriers and facilitating interactions among investors, the geographical dispersion of forex markets confines traders’ expertise to domestic currencies due to the cost of information gathering, thereby culminating in home bias behavior. Espousing geographic proximity theory, we endeavor to explore leading traders’ home bias propensities on forex social trading platforms and uncover how such behaviors may affect their performance and their appeal to followers from afar. Furthermore, we strive to delve into the role of governmental transparency of currency issuers on reconciling followers’ preference for profitable home-biased leading traders. In so doing, we quantify the influence of geographic proximity on leading traders’ performance and followers’ subscription tactics, which in turn yield insights into optimized emulative trading strategies for forex social trading.

Original language	English
Title of host publication	PACIS 2019 Proceedings
Editors	Dongming Xu, James Jiang, Hee-Woong Kim
Number of pages	8
Place of Publication	Atlanta, GA
Publisher	Association for Information Systems. AIS Electronic Library (AISeL)
Publication date	2019
Article number	180
Publication status	Published - 2019
Event	23rd Pacific Asia Conference on Information Systems: Secure ICT Platform for the 4th Industrial Revolution, PACIS 2019 - Shaanxi Guesthouse, Xi’an, China Duration: 8 Jul 2019 → 12 Jul 2019 Conference number: 23 http://www.pacis2019.org/

Conference

Conference	23rd Pacific Asia Conference on Information Systems: Secure ICT Platform for the 4th Industrial Revolution, PACIS 2019
Number	23
Location	Shaanxi Guesthouse
Country/Territory	China
City	Xi’an
Period	08/07/2019 → 12/07/2019
Internet address	http://www.pacis2019.org/

Keywords

Geographic proximity
Home bias behavior
Forex social trading
Governmental transparency

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Cite this

@inproceedings{c8b1a0659d2f4654b43e68041cf7ec86,

title = "Disentangling the Effects of Geographic Proximity on Forex Social Trading Platforms",

abstract = "Forex social trading is a nascent financial innovation that endows investors with opportunities to speculate on global currencies online by following and emulating investment strategies from savvy traders. Although social trading has been touted as a means of lowering distance barriers and facilitating interactions among investors, the geographical dispersion of forex markets confines traders{\textquoteright} expertise to domestic currencies due to the cost of information gathering, thereby culminating in home bias behavior. Espousing geographic proximity theory, we endeavor to explore leading traders{\textquoteright} home bias propensities on forex social trading platforms and uncover how such behaviors may affect their performance and their appeal to followers from afar. Furthermore, we strive to delve into the role of governmental transparency of currency issuers on reconciling followers{\textquoteright} preference for profitable home-biased leading traders. In so doing, we quantify the influence of geographic proximity on leading traders{\textquoteright} performance and followers{\textquoteright} subscription tactics, which in turn yield insights into optimized emulative trading strategies for forex social trading.",

keywords = "Geographic proximity, Home bias behavior, Forex social trading, Governmental transparency, Geographic proximity, Home bias behavior, Forex social trading, Governmental transparency",

author = "Mengli Yu and Yijing Li and Lim, {Eric T.K.} and Chee-Wee Tan",

year = "2019",

language = "English",

editor = "Dongming Xu and James Jiang and Hee-Woong Kim",

booktitle = "PACIS 2019 Proceedings",

publisher = "Association for Information Systems. AIS Electronic Library (AISeL)",

note = "23rd Pacific Asia Conference on Information Systems: Secure ICT Platform for the 4th Industrial Revolution, PACIS 2019 ; Conference date: 08-07-2019 Through 12-07-2019",

url = "http://www.pacis2019.org/",

}

Yu, M, Li, Y, Lim, ETK & Tan, C-W 2019, Disentangling the Effects of Geographic Proximity on Forex Social Trading Platforms. in D Xu, J Jiang & H-W Kim (eds), PACIS 2019 Proceedings., 180, Association for Information Systems. AIS Electronic Library (AISeL), Atlanta, GA, 23rd Pacific Asia Conference on Information Systems: Secure ICT Platform for the 4th Industrial Revolution, PACIS 2019, Xi’an, China, 08/07/2019. <http://aisel.aisnet.org/cgi/viewcontent.cgi?article=1179&context=pacis2019>

Disentangling the Effects of Geographic Proximity on Forex Social Trading Platforms. / Yu, Mengli; Li, Yijing; Lim, Eric T.K. et al.
PACIS 2019 Proceedings. ed. / Dongming Xu; James Jiang; Hee-Woong Kim. Atlanta, GA: Association for Information Systems. AIS Electronic Library (AISeL), 2019. 180.

Research output: Chapter in Book/Report/Conference proceeding › Article in proceedings › Research › peer-review

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T1 - Disentangling the Effects of Geographic Proximity on Forex Social Trading Platforms

AU - Yu, Mengli

AU - Li, Yijing

AU - Lim, Eric T.K.

AU - Tan, Chee-Wee

N1 - Conference code: 23

PY - 2019

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N2 - Forex social trading is a nascent financial innovation that endows investors with opportunities to speculate on global currencies online by following and emulating investment strategies from savvy traders. Although social trading has been touted as a means of lowering distance barriers and facilitating interactions among investors, the geographical dispersion of forex markets confines traders’ expertise to domestic currencies due to the cost of information gathering, thereby culminating in home bias behavior. Espousing geographic proximity theory, we endeavor to explore leading traders’ home bias propensities on forex social trading platforms and uncover how such behaviors may affect their performance and their appeal to followers from afar. Furthermore, we strive to delve into the role of governmental transparency of currency issuers on reconciling followers’ preference for profitable home-biased leading traders. In so doing, we quantify the influence of geographic proximity on leading traders’ performance and followers’ subscription tactics, which in turn yield insights into optimized emulative trading strategies for forex social trading.

AB - Forex social trading is a nascent financial innovation that endows investors with opportunities to speculate on global currencies online by following and emulating investment strategies from savvy traders. Although social trading has been touted as a means of lowering distance barriers and facilitating interactions among investors, the geographical dispersion of forex markets confines traders’ expertise to domestic currencies due to the cost of information gathering, thereby culminating in home bias behavior. Espousing geographic proximity theory, we endeavor to explore leading traders’ home bias propensities on forex social trading platforms and uncover how such behaviors may affect their performance and their appeal to followers from afar. Furthermore, we strive to delve into the role of governmental transparency of currency issuers on reconciling followers’ preference for profitable home-biased leading traders. In so doing, we quantify the influence of geographic proximity on leading traders’ performance and followers’ subscription tactics, which in turn yield insights into optimized emulative trading strategies for forex social trading.

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KW - Home bias behavior

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KW - Governmental transparency

KW - Geographic proximity

KW - Home bias behavior

KW - Forex social trading

KW - Governmental transparency

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A2 - Xu, Dongming

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PB - Association for Information Systems. AIS Electronic Library (AISeL)

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