The demand for public information by local and nonlocal investors: Evidence from investor-level data

Travis A. Dyer

Journal of Accounting and Economics, 2021, vol. 72, issue 1

Abstract: I examine the demand for public information by local and nonlocal investors. Using novel data on institutional investors' requests for financial information from the SEC, I document that investors acquire approximately 20% more financial information for their local investments. This pattern holds after controlling for investors’ 13(f) portfolio holdings. I further demonstrate that this pattern is concentrated in stocks eliciting behavioral biases as well as among investors with strong company relationships. Consistent with public information acquisition being more beneficial to local investors, I find that local investors exhibit both enhanced timeliness in acquiring public information and superior portfolio trading decisions when acquiring public information (on the order of 0.5% per quarter). In sum, these results provide evidence that investors demand more, and benefit more from, public information on local investments.

Keywords: Information acquisition; EDGAR; Accounting disclosures; Investor geography; Local bias (search for similar items in EconPapers)
JEL-codes: D82 D83 G11 G12 G14 G20 M40 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jaecon:v:72:y:2021:i:1:s016541012100032x

DOI: 10.1016/j.jacceco.2021.101417

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