Informed Investors and the Internet

Posted: 20 Sep 2010

See all articles by Amir Rubin

Amir Rubin

Simon Fraser University (SFU) - Beedie School of Business; Interdisciplinary Center (IDC) Herzliyah

Eran Rubin

University of Akron - College of Business Administration

Date Written: 2009-12

Abstract

During the last decade the Internet has become an increasingly important source for gathering company related information. We employ Wikipedia editing frequency as an instrument that captures the degree in which the population is engaged with the processing of company-related information. We find that firms whose information is processed by the population more frequently are associated with lower analysts' forecast errors, smaller analysts' forecast dispersions, and significant changes in bid-ask spreads on analysts' recommendation days. These results indicate that information processing over the Internet is related to the degree to which investors and analysts are informed about companies.

Suggested Citation

Rubin, Amir and Rubin, Eran, Informed Investors and the Internet (2009-12). Journal of Business Finance & Accounting, Vol. 37, Issue 7-8, pp. 841-865, July/August 2010, Available at SSRN: https://ssrn.com/abstract=1677703 or http://dx.doi.org/10.1111/j.1468-5957.2010.02187.x

Amir Rubin (Contact Author)

Simon Fraser University (SFU) - Beedie School of Business ( email )

8888 University Drive
Burnaby, British Colombia V5A 1S6
Canada

Interdisciplinary Center (IDC) Herzliyah ( email )

P.O. Box 167
Herzliya, 46150
Israel

Eran Rubin

University of Akron - College of Business Administration ( email )

Akron, OH 44325-4803
United States
330-9726443 (Phone)

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