The COVID-19 pandemic: How important is face-to-face interaction for information dissemination?

Social distancing and local bias

“…Cahill, Ho, and Yang (2021) and Ozik, Sadka, and Shen (2020) show that restricted mobility due to the COVID-19 pandemic lockdown increased retail investors' attention, attenuating illiquidity in stock markets. In a separate study, Cahill, Ho, and Yang (2020) also discover that firms located in counties with lower mobility experienced a weaker prompt price reaction to earnings announcements and a larger post earnings announcement drift (PEAD), suggesting that social distancing dampened price discovery in financial markets. At the time of writing, most states have commenced reopening and released the stay-at-home mandates.…”