Does digital technology development attenuate investor local attention bias?
研究发现数字技术发展并未减弱投资者对本地企业的关注偏差，反而加剧了这一偏差，且经济发展和制度环境越好，偏差越明显。
The advancement in digital and information technology (DIT) has profound effects on individuals, corporations, and society. The benefits of DIT, such as enhanced efficiency, easily access to information, and increased connectivity, are clear. However, scholars have raised various concerns regarding the plethora of information. For example, how DIT affects investors’ information acquisition behavior is unclear. Competing theories offer conflicting predictions in investor information acquisition. These predictions have different implications regarding whether investors acquire more information about local firms (local attention bias), versus about non-local firms, when information becomes easily accessible. Our empirical results show that as DIT develops, investors pay more attention to local firms, amplifying local attention bias. Economic development and a better developed institutional environment amplify rather than attenuate local attention bias. Mediation analysis further shows that DIT development increases attention co-movement and stock return correlation not only directly but also indirectly through local attention bias as a mediator. Our novel evidence suggests that when information is more easily accessible associated with DIT development, information asymmetry can be amplified when agents can choose what to learn, increasing polarization of information acquisition and selective exposure to information.