Network centrality and market information efficiency: Evidence from corporate site visits in China

Using a unique dataset of corporate site visits to China's capital market from 2013 to 2022, this study provides new evidence on the economic benefits brought by site visits from a social network perspective. Specifically, we study the effect of the corporate site visit network on stock market information efficiency. Our results show that network centrality is positively associated with stock price information content and price efficiency. This positive effect is robust and remains valid after a battery of robustness checks and endogeneity analyses, which confirms the existence of information interaction in the network of corporate site visits. Furthermore, we find evidence that network centrality of company visits positively influence stock information efficiency through lowering information asymmetry between listed companies and investors rather than the “irrational factor” mechanism. In brief, our paper contributes to the existing research by presenting evidence that corporate site visits are significant venues for investors to gain and exchange information about listed companies.