An illustration of theoretical mechanisms linking retail investors’ behavior to corporate strategy (IMAGE)
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First, retail investors’ initial investment expectations are generated based on fundamental company information communicated through official releases and market noise information through channels other than online platforms.
Second, retail investors may adjust their investment expectations based on feedback obtained through replies and discussions with other investors on online platforms. The iterative process of online opinion exchange and information filtering continuously refines their perceptions of target companies, potentially influencing their investment expectations (Hirshleifer et al., 2025).
Finally, target companies may adjust their corporate strategy. If retail investors choose to maintain or increase their holdings based on their updated investment expectations, a governance effect may occur, i.e., target companies are encouraged to adopt long-term strategies, such as green investments. Conversely, if investors sell or reduce their holdings, a market pressure effect may be triggered, potentially leading companies to prioritize short term gains.
Credit
Hongjie Zhang and Feng He (University of Science and Technology Beijing, China) Taoyuan Wei (CICERO Center for International Climate Research, Norway) Yingming Zhu and Yao Zhang (Nanjing University of Science and Technology, China) Lili Yan (University of Greenwich, UK)
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