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The Aggregate Effects of Decentralized Knowledge Production: Financial Bloggers and Information Asymmetries in the Stock Market

Journal of Communication, vol. 63, no. 6, pp. 1054-1069, 2013

26 Pages Posted: 19 Apr 2014  

Gregory D. Saxton

Schulich School of Business, York University

Ashley E. Anker

State University of New York (SUNY) - Buffalo

Date Written: April 30, 2013

Abstract

New media have markedly enhanced individuals’ capacity to produce and disseminate original knowledge; however, the literature has not extensively examined the broad effects of such decentralized production processes. The current study thus focuses on a unique context — the stock market — in which it is possible to test the aggregate impact of blog-based information production. Using data on 150 top financial bloggers and stock returns from the S&P 500, this study supports the hypothesis that financial blogging activity diminishes harmful information asymmetries between key market investors. This study thus adds to the “media effects” literature, highlights the societal relevance of bloggers, and shows how economic concepts and financial market settings can be employed for powerfully testing communication theories.

Keywords: blogs, economics, financial markets, knowledge production, information asymmetry, information environment, media effects, stock prices, new media

JEL Classification: G10, G14, M41

Suggested Citation

Saxton, Gregory D. and Anker, Ashley E., The Aggregate Effects of Decentralized Knowledge Production: Financial Bloggers and Information Asymmetries in the Stock Market (April 30, 2013). Journal of Communication, vol. 63, no. 6, pp. 1054-1069, 2013. Available at SSRN: https://ssrn.com/abstract=2426221

Gregory D. Saxton (Contact Author)

Schulich School of Business, York University ( email )

4700 Keele Street
Toronto, Ontario M3J 1P3
Canada

HOME PAGE: http://social-metrics.org

Ashley E. Anker

State University of New York (SUNY) - Buffalo ( email )

12 Capen Hall
Buffalo, NY 14260
United States

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