Big data as a governance mechanism
Abstract/Contents
- Abstract
- This study empirically investigates two effects of the availability of alternative data: stock price informativeness and its disciplining effect on managers' actions. Recent advancements in cloud computing, data collection, and machine learning have enabled technology companies to collect real-time, granular indicators of fundamentals to be sold to investment professionals. These data include consumer transactions and satellite images. I find that the introduction of these data increases price informativeness through decreased information acquisition costs, and these results are stronger in firms where sophisticated investors have the highest incentives to uncover information. In addition, the increased information content about future earnings contained in price affects managerial actions: I find that when alternative data become available, managers reduce their rent extraction through personal trading. These results are consistent with managers having less of an opportunity to trade profitably on their private information about future earnings because this information is reflected in prices sooner and to a greater extent. Furthermore, I find that investment efficiency, measured in various ways, increases after alternative data become available, consistent with price informativeness improving managers' incentives to invest and divest efficiently. My study informs academics, practitioners, and regulators about the impacts of reduced information acquisition costs for a group of sophisticated investors.
Description
| Type of resource | text |
|---|---|
| Form | electronic resource; remote; computer; online resource |
| Extent | 1 online resource. |
| Place | California |
| Place | [Stanford, California] |
| Publisher | [Stanford University] |
| Copyright date | 2018; ©2018 |
| Publication date | 2018; 2018 |
| Issuance | monographic |
| Language | English |
Creators/Contributors
| Author | Zhu, Christina |
|---|---|
| Degree supervisor | Larcker, David F |
| Thesis advisor | Larcker, David F |
| Thesis advisor | Hodrick, L. S. (Laurie Simon) |
| Thesis advisor | Lee, Charles M |
| Thesis advisor | Piotroski, Joseph D. (Joseph David) |
| Degree committee member | Hodrick, L. S. (Laurie Simon) |
| Degree committee member | Lee, Charles M |
| Degree committee member | Piotroski, Joseph D. (Joseph David) |
| Associated with | Stanford University, Graduate School of Business. |
Subjects
| Genre | Theses |
|---|---|
| Genre | Text |
Bibliographic information
| Statement of responsibility | Christina Zhu. |
|---|---|
| Note | Submitted to the Graduate School of Business. |
| Thesis | Thesis Ph.D. Stanford University 2018. |
| Location | electronic resource |
Access conditions
- Copyright
- © 2018 by Christina Zhu
- License
- This work is licensed under a Creative Commons Attribution Non Commercial 3.0 Unported license (CC BY-NC).
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