EconPapers    
Economics at your fingertips  
 

Big data in finance and the growth of large firms

Juliane Begenau, Maryam Farboodi and Laura Veldkamp

Journal of Monetary Economics, 2018, vol. 97, issue C, 71-87

Abstract: Two modern economic trends are the increase in firm size and advances in information technology. We explore the hypothesis that big data disproportionately benefits big firms. Because they have more economic activity and a longer firm history, large firms have produced more data. As processor speed rises, abundant data attracts more financial analysis. Data analysis improves investors’ forecasts and reduces equity uncertainty, reducing the firm’s cost of capital. When investors can process more data, large firm investment costs fall by more, enabling large firms to grow larger.

Keywords: Big data; Fintech; Firm size (search for similar items in EconPapers)
JEL-codes: E2 G1 D8 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0304393218302174
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:moneco:v:97:y:2018:i:c:p:71-87

Access Statistics for this article

Journal of Monetary Economics is currently edited by R. G. King and C. I. Plosser

More articles in Journal of Monetary Economics from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

 
Page updated 2019-01-08
Handle: RePEc:eee:moneco:v:97:y:2018:i:c:p:71-87