News or Noise: Mobile Internet Technology and Stock Market Activity

46 Pages Posted: 15 May 2020 Last revised: 22 Jun 2020

See all articles by Nerissa C. Brown

Nerissa C. Brown

University of Illinois at Urbana-Champaign

W. Brooke Elliott

University of Illinois at Urbana-Champaign

Russ Wermers

University of Maryland - Robert H. Smith School of Business; European Corporate Governance Institute (ECGI)

Roger M. White

Arizona State University (ASU) - School of Accountancy

Date Written: May 21, 2020

Abstract

Mobile internet devices reduce trading frictions and information search costs for investors, but also introduce attention-competing activities, such as social networking. We use exogenous nationwide and city-level outages of the Blackberry Internet Service (BIS) to investigate the effect of mobile internet technology on investors’ information-gathering vs. attention-diverting activities. We find that trading volume and trading frequency surge by about 5% on days when mobile internet systems go dark, consistent with a greater role for devices (when not dark) in diverting the limited attention of investors away from information-gathering and trading — even when they are used by presumably more sophisticated investors.

Keywords: mobile technology, investor activity, stock market liquidity, limited attention, distraction

JEL Classification: D83, G12, G14, L86

Suggested Citation

Brown, Nerissa C. and Elliott, W. Brooke and Wermers, Russell R. and White, Roger M., News or Noise: Mobile Internet Technology and Stock Market Activity (May 21, 2020). Available at SSRN: https://ssrn.com/abstract=3585128 or http://dx.doi.org/10.2139/ssrn.3585128

Nerissa C. Brown

University of Illinois at Urbana-Champaign ( email )

1206 South Sixth Street
Champaign, IL 61820
United States

W. Brooke Elliott

University of Illinois at Urbana-Champaign ( email )

1206 South Sixth Street
Champaign, IL 61820
United States

Russell R. Wermers (Contact Author)

University of Maryland - Robert H. Smith School of Business ( email )

Department of Finance
College Park, MD 20742-1815
United States
301-405-0572 (Phone)
301-405-0359 (Fax)

HOME PAGE: http://www.rhsmith.umd.edu/finance/rwermers/

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

Roger M. White

Arizona State University (ASU) - School of Accountancy ( email )

Tempe, AZ 85287
United States

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