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Informed Investors and the Internet

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  • Amir Rubin
  • Eran Rubin

Abstract

During the last decade the Internet has become an increasingly important source for gathering company related information. We employ Wikipedia editing frequency as an instrument that captures the degree in which the population is engaged with the processing of company‐related information. We find that firms whose information is processed by the population more frequently are associated with lower analysts' forecast errors, smaller analysts' forecast dispersions, and significant changes in bid‐ask spreads on analysts' recommendation days. These results indicate that information processing over the Internet is related to the degree to which investors and analysts are informed about companies.

Suggested Citation

  • Amir Rubin & Eran Rubin, 2010. "Informed Investors and the Internet," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 37(7‐8), pages 841-865, July.
    • Handle: RePEc:bla:jbfnac:v:37:y:2010:i:7-8:p:841-865
    DOI: 10.1111/j.1468-5957.2010.02187.x
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    References listed on IDEAS

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