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Digital communication and informed trading: Evidence from social distancing orders

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  • Ha, JinGi

Abstract

This study investigates the relationship between digital communication and the probability of informed trading (PIN). Using social distancing orders in March 2020 as an exogenous shock, this study identifies digital communication among market participants and finds that PIN significantly decreased after the social distancing orders became effective. Robustness tests at the state level and using an international sample further confirm the negative impact of digital communication on PIN. These findings suggest that the ongoing media transition from face-to-face to digital communication can negatively influence informed trading in financial markets.

Suggested Citation

  • Ha, JinGi, 2025. "Digital communication and informed trading: Evidence from social distancing orders," Finance Research Letters, Elsevier, vol. 74(C).
    • Handle: RePEc:eee:finlet:v:74:y:2025:i:c:s1544612325000510
    DOI: 10.1016/j.frl.2025.106786
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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
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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