Date of Degree

9-2019

Document Type

Dissertation

Degree Name

Ph.D.

Program

Business

Advisor

Donal Byard

Committee Members

Edward X. Li

Monica Neamtiu

Armen Hovakimian

Subject Categories

Accounting | Finance and Financial Management

Keywords

Broadband, Local Information Advanatge, Information Environment

Abstract

This study investigates the impact of local broadband coverage on the information environment of firms located in the United States. I hypothesize that more intensive local broadband coverage improves the overall quality of a firm’s information environment by allowing more locally generated firm-specific news to be more broadly disseminated via the Internet. I use the Federal Communication Commission (FCC)’s form 477 data to measure the intensity of local broadband coverage. I find that more intensive local broadband coverage near a firm is associated with a firm having smaller earnings surprises, and lower abnormal information asymmetry around quarterly earnings announcements. These relationships are stronger for firms that have more opaque information environments. Using the slope of local terrain as an instrumental variable for the intensity of local broadband coverage, I show that these relationships are robust to controlling for endogeneity. Finally, using stock “tweets” data collected from the StockTwist website, I show that more intensive local broadband coverage is associated with more firm-specific news being disseminated by locals via the Internet. My findings highlight the important role of local broadband coverage in facilitating the origination and transmission of the locally-generated firm-specific information.

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