Internet searching and stock price informativeness: Evidence from Google withdrawal in China
Shuxian Li and
Xinheng Liu
PLOS ONE, 2024, vol. 19, issue 3, 1-18
Abstract:
We analyze whether and how internet searching impacts stock price informativeness. Using the 2010 Google withdrawal in China as a quasi-natural experiment, we establish a causal effect between internet searching and stock price informativeness using a difference-in-difference framework. We find that firms with higher Google search volume experience a 10% decrease in stock price informativeness after the Google withdrawal. The negative effect of the Google withdrawal on stock price informativeness is pronounced in firms with more retail investors, larger state-ownership, and poor analysts’ earnings forecasts. Our results suggest that retail investors can benefit from internet searching to collect and process firm-specific information more efficiently.
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:plo:pone00:0297160
DOI: 10.1371/journal.pone.0297160
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