TY - JOUR
T1 - Informing the Market
T2 - The Effect of Modern Information Technologies on Information Production
AU - Gao, Meng
AU - Huang, Jiekun
N1 - Publisher Copyright:
© 2019 The Author(s) 2019. Published by Oxford University Press on behalf of The Society for Financial Studies. All rights reserved. For Permissions, please e-mail: [email protected].
PY - 2020/4/1
Y1 - 2020/4/1
N2 - Modern information technologies have fundamentally changed how information is disseminated in financial markets. Using the staggered implementation of the EDGAR system from 1993 to 1996 as a shock to information dissemination technologies, we find evidence that internet dissemination of corporate disclosures increases information production by corporate outsiders. Trades by individual investors, especially those with access to the internet, become more informative about future stock returns following the EDGAR implementation. The amount and accuracy of information produced by sell-side analysts increase after the implementation. These results suggest that greater and broader information dissemination facilitated by modern information technologies improves information production.
AB - Modern information technologies have fundamentally changed how information is disseminated in financial markets. Using the staggered implementation of the EDGAR system from 1993 to 1996 as a shock to information dissemination technologies, we find evidence that internet dissemination of corporate disclosures increases information production by corporate outsiders. Trades by individual investors, especially those with access to the internet, become more informative about future stock returns following the EDGAR implementation. The amount and accuracy of information produced by sell-side analysts increase after the implementation. These results suggest that greater and broader information dissemination facilitated by modern information technologies improves information production.
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U2 - 10.1093/rfs/hhz100
DO - 10.1093/rfs/hhz100
M3 - Review article
AN - SCOPUS:85083964221
SN - 0893-9454
VL - 33
SP - 1367
EP - 1411
JO - Review of Financial Studies
JF - Review of Financial Studies
IS - 4
ER -