Retail investor behavior and social media signals: exploring attention dynamics

Purpose This study aims to investigate how social media recommendations influence investor attention and retail investor activity in stock investing. Design/methodology/approach Using data from the Organisation for Economic Co-operation and Development (OECD)'s 2023 Adult Financial Literacy Survey across a sample of countries, the analysis employs a logistic regression model. To address potential endogeneity, both instrumental variable and propensity score matching techniques are applied. Findings Investor attention to social media influencers shows a positive and significant effect on stock investment. After adjusting for endogeneity, the main results remain robust. However, the moderating role of digital financial literacy is not consistent across all countries in the sample. Research limitations/implications The influencer recommendation question was newly introduced in this survey, limiting longitudinal comparisons. Additionally, the results are based on self-reported data from four countries. Originality/value This research contributes to the emerging field of digital behavioral finance and offers insights for the design of financial inclusion and education policies in increasingly digital environments.