Neighbors in Space : Satellite Imagery and Chinese B-Share Discount

In this study, we investigate the effect of satellite imagery availability on addressing information asymmetry and improving stock price efficiency. Recent development of remote-sensing technology has enabled sophisticated international investors to collect granular real-time indicators of firm fundamentals using satellite imagery. Our findings indicate that the application of satellite imagery among foreign investors can alleviate the inefficient Chinese B-share discount by resolving information asymmetry. Additionally, this study illustrates the role of satellite data in complementing traditional information channels and its ability in monitoring companies with unreliable disclosures. Our paper contributes to the literature of big data and capital market efficiency and provides policy implications on the technological development of financial industry and opening Chinese capital market in a high-quality manner