Online sales and stock price synchronicity: Evidence from China

Kai Wang, Jingjing Zhao and Jun Zhou

International Review of Financial Analysis, 2024, vol. 95, issue PA

Abstract: This paper investigates the effect of online sales on stock price synchronicity using the unique data of Chinese listed companies' online sales from e-commerce platforms. We document three notable findings. First, online sales are negatively associated with stock price synchronicity, suggesting that online sales facilitate the incorporation of firm-specific information into stock prices. Second, online sales reduce stock price synchronicity through analyst coverage and media coverage. Third, the synchronicity-reducing effect of online sales is stronger in firms with lower levels of urban Internet development, more competitive product markets, and worse earnings quality. Overall, our analyses suggest that online sales are an important determinant of stock price synchronicity.

Keywords: Online sales; Stock price synchronicity; Firm-specific information; Information asymmetry (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:95:y:2024:i:pa:s1057521924002886

DOI: 10.1016/j.irfa.2024.103356

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