Abstract: Based on the data of an online securities trading platform, this paper directly measures the online social interaction of investors for the first time and then tests the impact on investors’ participation in the Internet Finance market. We find that online social interaction will significantly increase the probability of investors’ participating in Internet financial investment, and this effect is more significant among investors working in non-financial industries, investors with small asset size, or speculative investors. As a result, investors who start to participate in the financial market driven by the attention induction mechanism under the social interaction have lower investment returns. In addition, this paper discusses the exogenous determinants of investors’ attention and finds that the IPO subscription event has an exogenous impact and will significantly increase the overall market social interaction and attention, but that impact will be reversed in the long run. Findings in this paper reveal the micro-mechanism between investors’ online social interaction and their investing behavior, and it also contributes new evidence to the researches on Internet Finance participation.

Key words: social interaction, investor attention, financial market participation, online securities trading platforms, IPO subscription