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The more the merrier? The impact of information overload on stock price synchronicity: Evidence from China

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  • Zhao, Jingmei
  • Gan, Qinyu

Abstract

Media coverage contributes to the effective absorption of information into asset prices, thereby reducing stock price synchronicity. However, with the proliferation of media coverage, information overload arises. Drawing on data from listed companies spanning the period from 2011 to 2022 we find a U-shaped correlation between media coverage and stock price synchronicity. This suggests that when media coverage surpasses investors’ analytical capacity beyond a certain threshold, it leads to the phenomenon of information overload and increasing stock price synchronicity. Our findings are significant for gaining an objective understanding of the role of information in capital market pricing efficiency.

Suggested Citation

  • Zhao, Jingmei & Gan, Qinyu, 2024. "The more the merrier? The impact of information overload on stock price synchronicity: Evidence from China," Finance Research Letters, Elsevier, vol. 62(PA).
    • Handle: RePEc:eee:finlet:v:62:y:2024:i:pa:s1544612324001120
    DOI: 10.1016/j.frl.2024.105082
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