USING BAIDU INDEX TO NOWCAST MOBILE PHONE SALES IN CHINA

Jianchun Fang, Wanshan Wu, Zhou Lu () and Eunho Cho ()
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Jianchun Fang: School of Economics, Zhejiang University of Technology, Hangzhou, Zhejiang Province 310023, P. R. China†Institute of World Economics and Politics, Chinese Academy of Social Sciences, Beijing 100732, P. R. China‡School of Economics, Zhejiang University, Hangzhou, Zhejiang Province 310027, P. R. China
Wanshan Wu: School of Economics, Zhejiang University of Technology, Hangzhou, Zhejiang Province 310023, P. R. China‡School of Economics, Zhejiang University, Hangzhou, Zhejiang Province 310027, P. R. China
Zhou Lu: #xA7;School of Economics, Tianjin University of Commerce, Tianjin City 300134, P. R. China
Eunho Cho: #xB6;School of Accounting and Finance, Kean University, Zhejiang Province 325060, P. R. China

The Singapore Economic Review (SER), 2019, vol. 64, issue 01, 83-96

Abstract: Most of the official data are released with a lag period, which increases the difficulties for decision-makers assessing the situation. To solve the problem of data lag, we used real-time Baidu Index to nowcast the Chinese consumer behavior of buying the best-selling smartphone, Huawei Mate 7. We introduced keywords like “Mate 7” and “Huawei” in Baidu Index search queries to examine whether the introduction of real-time data can improve the efficiency of benchmark model. Overall, our finding is that the introduction of Baidu Index, both in-sample and out-of-sample, can improve the prediction accuracy of the model significantly. The extended model provided a 55.2% outperformance relative to benchmark one. This can not only make up for official data release lag, but also help firms gain near-real-time insight into the consumer demand trends and reduce inventory costs. The findings suggest that firms can improve marketing performance by use of search engine promotion campaign.

Keywords: Search query data; Huawei; MIDAS (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (5)

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DOI: 10.1142/S021759081743007X

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