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Does the online interaction between retail investors and firms affect stock price synchronicity?

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  • Huang, Zhenxing
  • Liu, Jialiang
  • Zhang, Xiaojia
  • Li, WeiWei

Abstract

Using data from Chinese listed companies from 2010 to 2022, we examine the effect of online interactive platforms on stock price synchronicity. We find that investor–firm interactions increase stock price synchronicity. These results are robust to endogeneity checks. Our mechanism analysis suggests that information asymmetry accounts for this effect. This effect is more pronounced for firms with fewer institutional investors and those facing periods of heightened economic policy uncertainty.

Suggested Citation

  • Huang, Zhenxing & Liu, Jialiang & Zhang, Xiaojia & Li, WeiWei, 2024. "Does the online interaction between retail investors and firms affect stock price synchronicity?," Finance Research Letters, Elsevier, vol. 69(PB).
    • Handle: RePEc:eee:finlet:v:69:y:2024:i:pb:s1544612324012303
    DOI: 10.1016/j.frl.2024.106201
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    References listed on IDEAS

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    Cited by:

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    2. Xu, Chuanxin & Li, Xingchen, 2025. "When one asks, many follow: Influence of individual investors direct communication to enterprise on corporate financialization," Finance Research Letters, Elsevier, vol. 85(PA).

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    Keywords

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    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading

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