Keywords

information acquisition, EDGAR, accounting disclosures, investor geography, local bias

Abstract

I examine the demand for public information by local and nonlocal investors. Using novel data on institutional investors' requests for financial information from the SEC, I document that investors acquire approximately 20% more financial information for their local investments. This pattern holds after controlling for investors’ 13(f) portfolio holdings. I further demonstrate that this pattern is concentrated in stocks eliciting behavioral biases as well as among investors with strong company relationships. Consistent with public information acquisition being more beneficial to local investors, I find that local investors exhibit both enhanced timeliness in acquiring public information and superior portfolio trading decisions when acquiring public information (on the order of 0.5% per quarter). In sum, these results provide evidence that investors demand more, and benefit more from, public information on local investments.

Original Publication Citation

“The Demand for Public Information by Local and Non-local Investors: Evidence from Investor-Level Data” Journal of Accounting and Economics, 72, no. 1 (2021): 101417.

Document Type

Peer-Reviewed Article

Publication Date

2021

Publisher

Journal of Accounting and Economics

Language

English

College

Marriott School of Business

Department

Accountancy

University Standing at Time of Publication

Associate Professor

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Accounting Commons

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