Online investment forum and the market response around earnings announcement in the Chinese stock markets

Hao, Qian; Dong, Dawei; Wu, Keke

doi:10.1108/ijaim-11-2018-0128

Cited by 7 publications

(3 citation statements)

References 53 publications

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“…Eastmoney website provides the largest and the most influential financial portal; its effective browsing time accounts for 55.6 per cent of the total effective browsing time in financial portals in China [1]. At present, Eastmoney's internet stock message board is commonly used by researchers who focus on investor communication (Jiang et al, 2016), information diffusion (Ackert et al, 2016;Li et al, 2018;Hao et al, 2019), investor sentiment (Lai et al, 2014) and even investor attention (Huang et al, 2016;Zhang and Tao, 2018), which verifies that big data is a useful information (Coyne et al, 2018) . The CDT is a database of Eastmoney that covers high frequency data of stocks, securities, funds and commodities.…”

Section: Sample and Descriptive Analysis 31 Sample Selectionmentioning

confidence: 99%

Does advertising really work?

Dong

2020

IJAIM

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Purpose This paper aims to examine the direct and indirect effects of advertising on investor behavior. Design/methodology/approach The authors use a novel and direct measure of investor attention: the number of investors whose watch lists has the stock. Findings The authors find that beyond its direct effect through information dissemination, advertising has an indirect effect with regard to grabbing investor attention and the trading response. The authors further find that an increase in attention induces a positive influence on the impact of advertising on investor behavior. Originality/value First, it complements studies of home bias, in which investors are more likely to buy familiar stocks. Second, it also complements the literature on advertising and investor attention and on attention and capital markets. Third, with a new and unambiguous measure of investor attention. Fourth, combining the direct and indirect aspects, this study presents a detailed description of the financial market effect of advertising.

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Section: Sample and Descriptive Analysis 31 Sample Selectionmentioning

confidence: 99%

Does advertising really work?

Dong

2020

IJAIM

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“…In these forums, breaking financial news and stock-related headlines are often heavily discussed and analyzed by online investors, and rumors are also circulated (i.e. before any associated, confirmed news is announced), see Bommel (2003), Li et al (2018) and Hao et al (2019). Antweiler and Frank (2004) have shown that online talk is not just noise; indeed, it also exerts substantial effects on stock-trading activities [2].…”

Section: Introductionmentioning

confidence: 99%

The asymmetric online talk effect

Zhang

Prombutr

2021

RBF

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PurposeThe authors investigate the extent to which online talk can influence contemporaneous and future stock trading, especially when market news is unpresented.Design/methodology/approachThe authors propose an improved sentiment formula incorporating online hype, neutral sentiment and poster reputation. In addition, they conduct event study, OLS regression analyses and probit models.FindingsFirst, investors tend to be more talkative in relation to firms that are (1) smaller size, (2) more growth-like, (3) with lower prices and higher short interests and (4) of higher beta. Second, the bullish tone of investors positively affects the abnormal returns of small-capitalization stocks. However, online talk has little impact on large-capitalization stocks, except that more postings boost trading liquidity. Third, online talk predicts the presence of future news regardless of firm size, with stronger predictive power found for small-capitalization stocks.Practical implicationsIt is of interest to practitioners and researchers to study online talk so as to better understand the trading psychology of retail investors and the effects on the stock market. Furthermore, policymakers are interested in tracking activities on stock message boards in order to prevent security fraud and protect investors' interests.Originality/valueThe results are robust and suggest that online talk has significant impacts on stock trading exploiting an information asymmetry. This study of stock message board posting activities helps researchers to understand whether message contents contain valuable and unique content compared with information available via more traditional media channels.

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“…Hao et al (2019) examine how aggregate posts affect the market reaction to earnings news using data from the same stock message board as ours. Based on data on 19 firms, they find that more online posts after earnings announcements facilitate the incorporation of earnings surprises into stock prices.8The website is http://guba.eastmoney.com.…”

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Local information advantage and stock returns: Evidence from social media

Huang,

Li,

et al. 2024

Contemporary Accting Res

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We examine the information asymmetry between local and nonlocal investors with a large dataset of stock message board postings. We document that abnormal relative postings of a firm, i.e., unusual changes in the volume of postings from local versus nonlocal investors, capture locals' information advantage. This measure positively predicts firms' short‐term stock returns as well as those of peer firms in the same city. Sentiment analysis shows that posting activities primarily reflect good news, potentially due to social transmission bias and short‐sales constraints. We identify the information driving return predictability through content‐based analysis. Abnormal relative postings also lead analysts' forecast revisions. Overall, investors' interactions on social media contain valuable geography‐based private information.This article is protected by copyright. All rights reserved.

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Online investment forum and the market response around earnings announcement in the Chinese stock markets

Cited by 7 publications

References 53 publications

Does advertising really work?

Does advertising really work?

The asymmetric online talk effect

Local information advantage and stock returns: Evidence from social media

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