Download This PaperOn 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
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: Suggested Citation
Zsolt Katona
University of California, Berkeley - Haas School of Business ( email )
545 Student Services Building, #1900
2220 Piedmont Avenue
Berkeley, CA 94720
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