Marketing

Initial public offering

Engineering

Volatility (finance)

Stock (firearms)

Strategic management

Accounting

Economics

Ask price

Market liquidity

Bid price

Business

Mechanical engineering

Investor relations

Financial statement

Monetary economics

Audit

Financial economics

Finance

Journal of Accounting and Economics

Between 2010 and 2017, Chinese investors used an investor interactive platform (IIP) to ask public companies around 2.5 million questions, the vast majority of which received a reply within two weeks. We analyze these IIP dialogues using a BERT-based algorithm and provide preliminary evidence on their causes and consequences. Our analyses show most questions reflect investors’ difficulties in processing information already in the public domain. Controlling for other news, higher IIP activity is associated with increases in trading volume, return volatility, market liquidity, and price informativeness as well as decreases in bid-ask spread. Financial statement-related postings increase around the adoption of new accounting standards. Collectively, our results show that investors face significant information processing costs but that IIP activities help reduce these costs, leading to improvements in stock price formation.

Shall we talk? The role of interactive investor platforms in corporate communication