The Demand for Public Information by Local and Nonlocal Investors: Evidence from Investor-Level Data

Journal of Accounting & Economics (JAE), Forthcoming

47 Pages Posted: 17 Apr 2021

Date Written: April 12, 2021

Abstract

I examine the demand for public information by local and nonlocal investors. Using novel data on institutional investors’ requests for financial information from the SEC, I document that investors acquire approximately 20% more financial information for their local investments. This pattern holds after controlling for investors’ 13(f) portfolio holdings. I further demonstrate that this pattern is concentrated in stocks eliciting behavioral biases as well as among investors with strong company relationships. Consistent with public information acquisition being more beneficial to local investors, I find that local investors exhibit both enhanced timeliness in acquiring public information and superior portfolio trading decisions when acquiring public information (on the order of 0.5% per quarter). In sum, these results provide evidence that investors demand more, and benefit more from, public information on local investments.

Keywords: Information Demand, EDGAR, Investor Geography, Local Bias

JEL Classification: D82, D83, G11, G12, G14, G20, M40

Suggested Citation

Dyer, Travis, The Demand for Public Information by Local and Nonlocal Investors: Evidence from Investor-Level Data (April 12, 2021). Journal of Accounting & Economics (JAE), Forthcoming, Available at SSRN: https://ssrn.com/abstract=3824973

Travis Dyer (Contact Author)

Brigham Young University ( email )

Provo, UT 84602
United States

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