Crowd Governance: The Monitoring Role of Wikipedia in the Financial Market



In this study, we explore whether Wikipedia plays a governance role in the financial market by reducing the information disadvantage of individual investors. We hypothesize that the aggregation of information on Wikipedia enables individual investors to collectively monitor insiders and institutional investors. Using the creation of a firm Wikipedia page as an information event, our empirical results support our hypothesis and further show that the governance effect is stronger for firms with higher institutional ownership concentration as well as those with more intensive insider trading activity. Taken together, these findings support the view that Wikipedia helps mitigate the information asymmetry among individual investors, institutional investors, and corporate insiders.

Weifang Wu is a Ph.D. candidate in the School of Business and Management at Hong Kong University of Science and Technology. Her research interests involve examining the impact of online platforms on social and economic outcomes. Her work particularly focuses on three areas: social media in financial markets, online advertising, and online word-of-mouth. Weifang's research is closely related to other business disciplines such as finance, accounting, and marketing. She applies empirical methods including econometrics, event study and machine learning. Weifang received her master’s degree and bachelor’s degree from Harbin Institute of Technology in China.