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Informed Investors and the Internet

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  • Amir Rubin
  • Eran Rubin

Abstract

During the last decade the Internet has become an increasingly important source for gathering company related information. We employ Wikipedia editing frequency as an instrument that captures the degree in which the population is engaged with the processing of company-related information. We find that firms whose information is processed by the population more frequently are associated with lower analysts' forecast errors, smaller analysts' forecast dispersions, and significant changes in bid-ask spreads on analysts' recommendation days. These results indicate that information processing over the Internet is related to the degree to which investors and analysts are informed about companies. Copyright (c) 2010 Blackwell Publishing Ltd.

Suggested Citation

  • Amir Rubin & Eran Rubin, 2010. "Informed Investors and the Internet," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 37(7-8), pages 841-865.
  • Handle: RePEc:bla:jbfnac:v:37:y:2010-07:i:7-8:p:841-865
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    References listed on IDEAS

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    Cited by:

    1. Ackert, Lucy F. & Jiang, Lei & Lee, Hoan Soo & Liu, Jie, 2016. "Influential investors in online stock forums," International Review of Financial Analysis, Elsevier, vol. 45(C), pages 39-46.
    2. Chen, Linda H. & Dyl, Edward A. & Jiang, George J. & Juneja, Januj A., 2015. "Risk, illiquidity or marketability: What matters for the discounts on private equity placements?," Journal of Banking & Finance, Elsevier, vol. 57(C), pages 41-50.
    3. Zreik, Ousayna & Louhichi, Waël, 2017. "Risk sentiment and firms’ liquidity in the French market," Research in International Business and Finance, Elsevier, vol. 39(PB), pages 809-823.
    4. Leung, Henry & Ton, Thai, 2015. "The impact of internet stock message boards on cross-sectional returns of small-capitalization stocks," Journal of Banking & Finance, Elsevier, vol. 55(C), pages 37-55.
    5. Matthias Bank & Martin Larch & Georg Peter, 2011. "Google search volume and its influence on liquidity and returns of German stocks," Financial Markets and Portfolio Management, Springer;Swiss Society for Financial Market Research, vol. 25(3), pages 239-264, September.
    6. Moussa, Faten & Delhoumi, Ezzeddine & Ouda, Olfa Ben, 2017. "Stock return and volatility reactions to information demand and supply," Research in International Business and Finance, Elsevier, vol. 39(PA), pages 54-67.
    7. repec:eee:pacfin:v:49:y:2018:i:c:p:1-14 is not listed on IDEAS
    8. repec:eee:glofin:v:33:y:2017:i:c:p:38-50 is not listed on IDEAS
    9. Takeda, Fumiko & Wakao, Takumi, 2014. "Google search intensity and its relationship with returns and trading volume of Japanese stocks," Pacific-Basin Finance Journal, Elsevier, vol. 27(C), pages 1-18.
    10. repec:kap:jfamec:v:38:y:2017:i:4:d:10.1007_s10834-017-9526-7 is not listed on IDEAS
    11. repec:ipg:wpaper:24 is not listed on IDEAS
    12. Vlastakis, Nikolaos & Markellos, Raphael N., 2012. "Information demand and stock market volatility," Journal of Banking & Finance, Elsevier, vol. 36(6), pages 1808-1821.
    13. repec:ipg:wpaper:2013-024 is not listed on IDEAS
    14. Mohamed Arouri & Amal Aouadi & Philippe Foulquier & Frédéric Teulon, 2013. "Can Information Demand Help to Predict Stock Market Liquidity ? Google it !," Working Papers 2013-24, Department of Research, Ipag Business School.
    15. repec:eee:riibaf:v:44:y:2018:i:c:p:532-546 is not listed on IDEAS
    16. repec:eee:ecmode:v:70:y:2018:i:c:p:194-202 is not listed on IDEAS
    17. Wael Louhichi & Ousayna Zreik, 2015. "Corporate Risk Reporting: A study of The Impact of Risk Disclosure on Firms Reputation," Economics Bulletin, AccessEcon, vol. 35(4), pages 2395-2408.

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