Displaced by Big Data

Maxime Bonelli and Thierry Foucault
Additional contact information
Maxime Bonelli: London Business School

Working Papers from HAL

Abstract: Big data allows active asset managers to find new trading signals but doing so requires new skills. Thus, it can reduce the ability of asset managers lacking these skills to produce superior returns. Consistent with this possibility, we find that the release of satellite imagery data tracking firms' parking lots reduces active mutual funds' stock picking abilities in stocks covered by this data. This decline is stronger for funds that are more likely to rely on traditional sources of expertise (e.g., specialized industry knowledge) to generate their signals, leading them to divest from covered stocks. These results suggest that big data has the potential to displace high-skill workers in finance.

Keywords: Big data; active mutual funds; stock-picking skill; quantitative investment (search for similar items in EconPapers)
Date: 2023-08-01
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:hal:wpaper:hal-04415270

DOI: 10.2139/ssrn.4527672

Access Statistics for this paper

More papers in Working Papers from HAL
Bibliographic data for series maintained by CCSD ().