Public data acces and stock price synchronicity: Evidence from China*

This paper investigates how public data facilitates financial market informativeness. The increasing information efficiency in digital economics has raised great attention in extant literature. Using the staggered difference-indifferences approach, we investigate how public data access enhanced by establishing governmental public data platforms affects stock price synchronicity, measured by the relative importance of firm-specific information to market-level information capitalized into stock prices. We find that public data access significantly reduces local firms' stock price synchronicity. The underlying mechanism is that public data access mitigates informationacquisition costs and facilitates the incorporation of firm-specific information into investors' decision-making rather than increased market attention or corporate disclosure quality. Public data platforms' informational role is magnified when investors face higher informed trade risk or concern about poor corporate governance. Under the urgent need for value realization of data elements, we provide essential implications in promoting public data opening to improve financial market efficiency.

Automated summary

This paper investigates the impact of public data access on financial market informativeness. The study finds that public data access reduces stock price synchronicity by reducing information acquisition costs and facilitating the incorporation of firm-specific information into investors' decision-making. Additionally, the informational role of public data platforms is magnified when investors face higher informed trade risk or concern about poor corporate governance.