Rongda Chen , Weidao Mao , Shengnan Wang , Chenglu Jin
{"title":"Can companies' input of data factor eliminate investors' home biases?","authors":"Rongda Chen , Weidao Mao , Shengnan Wang , Chenglu Jin","doi":"10.1016/j.irfa.2024.103763","DOIUrl":null,"url":null,"abstract":"<div><div>Data as a new production factor plays an increasingly crucial role in influencing investor decision-making. This paper investigates how the data factor input, measured using a two-stage regression decomposition approach, impacts investors' home biases. Analyzing a sample of Chinese listed companies from 2012 to 2022, we find that: 1) companies' input of data factor effectively reduces investors' home biases; 2) this reduction is primarily driven by a decrease in information asymmetry; 3) the mitigating effect of data factor input is further strengthened by external factors such as heightened attention from analysts and stronger corporate governance. Additionally, our results reveal that this mitigating effect is more pronounced among companies facing high financing constraints, possessing low reputations, operating in low-technology industries, or located in regions with underdeveloped digital financial infrastructure. These findings offer new insights into underscore the critical role of data factor in shaping capital markets.</div></div>","PeriodicalId":48226,"journal":{"name":"International Review of Financial Analysis","volume":"96 ","pages":"Article 103763"},"PeriodicalIF":7.5000,"publicationDate":"2024-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"International Review of Financial Analysis","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S1057521924006951","RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 0
Abstract
Data as a new production factor plays an increasingly crucial role in influencing investor decision-making. This paper investigates how the data factor input, measured using a two-stage regression decomposition approach, impacts investors' home biases. Analyzing a sample of Chinese listed companies from 2012 to 2022, we find that: 1) companies' input of data factor effectively reduces investors' home biases; 2) this reduction is primarily driven by a decrease in information asymmetry; 3) the mitigating effect of data factor input is further strengthened by external factors such as heightened attention from analysts and stronger corporate governance. Additionally, our results reveal that this mitigating effect is more pronounced among companies facing high financing constraints, possessing low reputations, operating in low-technology industries, or located in regions with underdeveloped digital financial infrastructure. These findings offer new insights into underscore the critical role of data factor in shaping capital markets.
期刊介绍:
The International Review of Financial Analysis (IRFA) is an impartial refereed journal designed to serve as a platform for high-quality financial research. It welcomes a diverse range of financial research topics and maintains an unbiased selection process. While not limited to U.S.-centric subjects, IRFA, as its title suggests, is open to valuable research contributions from around the world.