Information Searching from New Media and Households’ Investment in Risky Assets: New Evidence from a Quasi-Natural Experiment

In 2010, Google withdrew from mainland China unexpectedly, which is an important issue that significantly changed the information acquisition environment in China. After that, Baidu has dominated a search engine in China, which provides less informative results. We use Google’s withdrawal from mainland China as a quasi-experiment and the data from Chinese General Social Survey (CGSS) to test the relationship between the information searching in new media and household investment in risky assets. By using the difference-in-difference method, we find that Google’s withdrawal from mainland China significantly decreased households’ willingness to invest in risky assets. The results are robust after parallel trend test, PSM–DID, entropy balancing, placebo test, as well as changing the control and treatment group, using a Logit model and excluding other factors. As for the heterogeneity, the effects are different among females and males, rural and urban residents, and residents with different incomes. As for the plausible channels, we find that Google’s withdrawal from mainland China significantly affected firms’ information disclosure quality, the convenience of getting information and the risk preference, by which their investment behaviors are affected.