IDEAS home Printed from https://ideas.repec.org/a/taf/raaexx/v29y2022i3p582-602.html
   My bibliography  Save this article

Does individual investors’ online search activities reduce information asymmetry? Evidence from stock exchanges’ comment letters in China

Author

Listed:
  • Weijia Hu
  • Xiangfei Fu

Abstract

Commonly treated as ‘dumb noise traders’, individual investors are widely known as the group who are unaware, unsophisticated, and have low financial literacy. Their trading behavior in the capital markets is often assumed away by previous literature, let alone their information demand and the impacts on capturing the market pricing dynamics. In this study, we build a framework for understanding the information demand of individual investors and analyze their information role using the releases of comment letters in China as the setting. We find that: (a) individual investors’ information demand is high when there is an inferior information environment; (b) individual investors’ online search behavior dampens negative shocks to unexpected events. In an additional analysis, we find that the information searching of investors has abating effects on the cost of information remediation.

Suggested Citation

  • Weijia Hu & Xiangfei Fu, 2022. "Does individual investors’ online search activities reduce information asymmetry? Evidence from stock exchanges’ comment letters in China," Asia-Pacific Journal of Accounting & Economics, Taylor & Francis Journals, vol. 29(3), pages 582-602, May.
    • Handle: RePEc:taf:raaexx:v:29:y:2022:i:3:p:582-602
    DOI: 10.1080/16081625.2020.1754248
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/16081625.2020.1754248
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/16081625.2020.1754248?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Chen, Xing & Wu, Chongfeng, 2022. "Retail investor attention and information asymmetry: Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 75(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:raaexx:v:29:y:2022:i:3:p:582-602. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/raae20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.