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Publications
  • May 2021
  • Article
  • Journal of Accounting Research

The Firm Next Door: Using Satellite Images to Study Local Information Advantage

By: Jung Koo Kang, Lorien Stice-Lawrence and Forester Wong
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Abstract

We use novel satellite data that track the number of cars in the parking lots of 92,668 stores for 71 publicly listed U.S. retailers to study the local information advantage of institutional investors. We establish car counts as a timely measure of store-level performance and find that institutional investors adjust their holdings in response to the performance of local stores, and that these trades are profitable on average. These results suggest that local investors have an advantage when processing information about nearby operations. However, some institutional investors do not adjust for the quality of their local information and continue to rely on local signals even when they are poor predictors of firm performance and returns. This overreliance on poor local information is reduced for institutional investors with greater industry expertise and those with greater incentives to maximize short-term trading profits.

Keywords

Satellite Images; Store-level Performance; Institutional Investors; Local Advantage; Overweighting; Processing Costs; Alternative Data; Big Data; Emerging Technologies; Information; Quality; Institutional Investing; Decision Making; Behavioral Finance; Analytics and Data Science

Citation

Kang, Jung Koo, Lorien Stice-Lawrence, and Forester Wong. "The Firm Next Door: Using Satellite Images to Study Local Information Advantage." Journal of Accounting Research 59, no. 2 (May 2021): 713–750.
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About The Author

Jung Koo Kang

Accounting and Management
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    • July 2025
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    Silicon Valley Bank: Gone in 36 Hours

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    Digital Lending and Financial Well-Being: Through the Lens of Mobile Phone Data

    By: AJ Chen, Omri Even-Tov, Jung Koo Kang and Regina Wittenberg-Moerman
    • June 2025
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    Fair Value Accounting for Debt Securities and Loan Assets

    By: Jung Koo Kang, Krishna G. Palepu and Charles CY Wang
More from the Authors
  • Silicon Valley Bank: Gone in 36 Hours By: Jung Koo Kang, Krishna G. Palepu and Charles C.Y. Wang
  • Digital Lending and Financial Well-Being: Through the Lens of Mobile Phone Data By: AJ Chen, Omri Even-Tov, Jung Koo Kang and Regina Wittenberg-Moerman
  • Fair Value Accounting for Debt Securities and Loan Assets By: Jung Koo Kang, Krishna G. Palepu and Charles CY Wang
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