Crowd-sourced investment research and corporate innovation strategy

We study the role of crowd-sourced investment research as a source of information for corporate strategic decisions, such as investments into innovation. Using a comprehensive sample of research reports published by individual contributors on Seeking Alpha and exogenous variation in shared coverage, we find that firms are more likely to invest into technologies similar to firms covered by the same contributor. We show that the effect is not due to contributors anticipating technological convergence, but instead is more pronounced for contributors providing more unique, specific, and technology-focused content. Our findings suggest that contributor-generated research on specialized online investment platforms not only provides incremental information for capital markets, but also enhances firms' information environment as an additional source of information that guides corporate strategic decisions.