Online Information Acquisition and Investor Trading

Abstract

We examine the empirical associations between online information acquisition and several aspects of investors’ trading activities. We find that trading volume and buy-sell imbalance between small and large traders are positively associated with abnormal ticker search on Google. These positive trading-search associations are more pronounced for firms with large accruals, during earnings announcement periods, and in more recent years. Our evidence is consistent with information acquisition triggers investor disagreement.