Dr Alminas Žaldokas, Assistant Professor of Finance, Hong Kong University of Science and Technology

Using granular minute by minute television advertising data covering approximately 326,000 ads, 301 firms, and $20 billion in ad spending, we study the real time effects of TV advertising on investor search for online financial information and subsequent trading activity. Our identification strategy exploits the fact that viewers in different US time zones are exposed to the same programming and national advertising at different times, allowing us to control for contemporaneous confounding events. We find that an average TV ad leads to a three per cent increase in SEC EDGAR queries and an eight per cent increase in Google searches for financial information within 15 minutes of the airing of that ad. Such advertising effects spill over through horizontal and vertical product market links to financial information searches on closest rivals and suppliers. The ad induced queries on the advertiser increase trading volume and contribute to a temporary rise in the stock price. This suggests that advertising, originally intended for consumers, has a non negligible effect on financial markets.

Speaker bio

Dr Žaldokas is an Assistant Professor of Finance at the Hong Kong University of Science and Technology (HKUST). His main research focuses on the interaction between firm decisions in the financial and product markets. In particular, he studies corporate finance decisions that relate to the firm investment in innovation and the formation of collusive arrangements. His papers in this research area have been published in the Journal of Financial Economics, Review of Financial Studies, Management Science, Journal of Accounting Research, and RAND Journal of Economics. Dr Žaldokas received his PhD from INSEAD in France.

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Date: 7 May 2020
Start Time: 14:00
End Time: 15:00

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Open to: Members of the University of Cambridge

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Date: 7 May 2020
Start Time: 14:00
End Time: 15:00