Does increased broadband internet penetration improve the quality of investors' information about local firms?

Anna Bergman Brown and Zhiyuan Tu

Accounting and Finance, 2025, vol. 65, issue 2, 1691-1721

Abstract: This study documents that greater availability of residential high‐speed broadband internet in the area around a firm's headquarters is associated with an improvement in the quality of analysts' information, and the information efficiency of stock prices, for local firms. These results are driven by firms in areas with two and fewer local broadband providers, consistent with these firms benefiting more from additional information dissemination by locals. Increased internet penetration is also positively associated with locals producing more stock tweets about local firms. Our study provides evidence that increased broadband penetration is associated with positive information externalities for local firms.

Date: 2025
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https://doi.org/10.1111/acfi.13382

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