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The Effect of Google's Local Biases on Information Asymmetry and Market Response

    Authors

    • Mohammad Ebrahimi 1
    • Reza Hesarzadeh 2
    • Mahdi Moradi 2

    1 Ms Student of Accounting, Faculty of Economics and Administrative Sciences, Ferdowsi University of Mashhad

    2 Associate Professor, Department of Accounting, Faculty of Economics and Administrative Sciences, Ferdowsi University of Mashhad

,

Document Type : Research Paper

10.30479/jfak.2021.15216.2841
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Abstract

Purpose: This study examines the effect of Google's local search on information asymmetry before earnings announcement and short-term and long-term market reactions after earnings announcement.
Method: Google's local biases are measured by Google Trend service information. Also, to measure information asymmetry and market response, abnormal stock returns in the periods before and after the announcement of earnings are used. The research sample includes 64 companies listed on the Tehran Stock Exchange for the years 1393 to 1398.
Results: The results of the study indicate that local bias increases the information asymmetry before the announcement of profits. However, the impact of local bias on market response is limited to a short period after the announcement of profits.
Conclusion: Overall, the evidence suggests that local biases resulting from investors' attention to companies close to their place of residence affect information asymmetries and short-term market response.
Contribution: This study shows for the first time that even in the age of the Internet and the ease of access to information of companies, the geographical location of companies influences the decisions of Iranian investors and the stock market.
 

Keywords

  • Familiarity Bias
  • Local Bias
  • Information Asymmetry
  • Local Information Advantage
  • Market Response

Main Subjects

  • Financial Accounting
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References
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Financial Accounting Knowledge
Volume 9, Issue 2 - Serial Number 33
July 2022
Pages 193-213
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How to cite
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  • Article View: 300
  • PDF Download: 461

APA

Ebrahimi, M. , Hesarzadeh, R. and Moradi, M. (2022). The Effect of Google's Local Biases on Information Asymmetry and Market Response. Financial Accounting Knowledge, 9(2), 193-213. doi: 10.30479/jfak.2021.15216.2841

MLA

Ebrahimi, M. , , Hesarzadeh, R. , and Moradi, M. . "The Effect of Google's Local Biases on Information Asymmetry and Market Response", Financial Accounting Knowledge, 9, 2, 2022, 193-213. doi: 10.30479/jfak.2021.15216.2841

HARVARD

Ebrahimi, M., Hesarzadeh, R., Moradi, M. (2022). 'The Effect of Google's Local Biases on Information Asymmetry and Market Response', Financial Accounting Knowledge, 9(2), pp. 193-213. doi: 10.30479/jfak.2021.15216.2841

CHICAGO

M. Ebrahimi , R. Hesarzadeh and M. Moradi, "The Effect of Google's Local Biases on Information Asymmetry and Market Response," Financial Accounting Knowledge, 9 2 (2022): 193-213, doi: 10.30479/jfak.2021.15216.2841

VANCOUVER

Ebrahimi, M., Hesarzadeh, R., Moradi, M. The Effect of Google's Local Biases on Information Asymmetry and Market Response. Financial Accounting Knowledge, 2022; 9(2): 193-213. doi: 10.30479/jfak.2021.15216.2841

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