AAA Spark Meeting of Regions

Shall We Talk? The Role of Interactive Investor Platforms in Corporate Communication

• In Event: Information Technology, Financial Information, and Effective Capital Markets

Abstract

Between 2010 and 2017, Chinese investors used an online platform to ask publicly-listed firms over 2.5 million questions, the vast majority of which received a reply from management within two weeks. Our analyses show that: (a) most questions reflect difficulties in integrating information that is already in the public domain; (b) the level of platform activity varies by market condition and company performance; and (c) higher platform activities are associated with decreases in firms’ cost-of-capital and increases in their market liquidity. Collectively, our results suggest interactive investor platforms (IIPs) can mitigate information processing costs and improve market price formation.

Authors

• Charles M. C. Lee, Stanford University

• Qinlin Zhong, School of Business, Renmin University of China