On the Capital Market Consequences of Big Data: Evidence from Outer Space

Journal of Financial and Quantitative Analysis

49 Pages Posted: 15 Mar 2019 Last revised: 7 Dec 2023

See all articles by Zsolt Katona

Zsolt Katona

University of California, Berkeley - Haas School of Business

Marcus Painter

Saint Louis University - Department of Finance

Panos N. Patatoukas

University of California, Berkeley - Haas School of Business

Jean (Jieyin) Zeng

National University of Singapore (NUS) - NUS Business School

Date Written: July 30, 2018

Abstract

We use the introduction of satellite coverage of major retailers to study the capital market implications of unequal access to big data. Satellite data enabled sophisticated investors with access to such data to formulate profitable trading strategies, especially by targeting the upcoming reports of retailers with bad news for the quarter. The introduction of satellite data led to more informed short-selling activity, less informed individual buying activity, and lower stock liquidity around the reports of retailers with satellite coverage. We conclude that unequal access to big data can increase information asymmetry among market participants without immediately enhancing price discovery.

Keywords: Big Data; Satellite Imagery; Short Selling; Information Asymmetry

JEL Classification: G12, G14, G23

Suggested Citation

Katona, Zsolt and Painter, Marcus and Patatoukas, Panos N. and Zeng, Jean, On the Capital Market Consequences of Big Data: Evidence from Outer Space (July 30, 2018). Journal of Financial and Quantitative Analysis, Available at SSRN: https://ssrn.com/abstract=3222741 or http://dx.doi.org/10.2139/ssrn.3222741

Zsolt Katona

University of California, Berkeley - Haas School of Business ( email )

545 Student Services Building, #1900
2220 Piedmont Avenue
Berkeley, CA 94720
United States

Marcus Painter

Saint Louis University - Department of Finance ( email )

Saint Louis, MO
United States

Panos N. Patatoukas (Contact Author)

University of California, Berkeley - Haas School of Business ( email )

545 Student Services Building, #1900
2220 Piedmont Avenue
Berkeley, CA 94720
United States

HOME PAGE: http://https://sites.google.com/berkeley.edu/panos

Jean Zeng

National University of Singapore (NUS) - NUS Business School ( email )

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