On the morning of July 11, 2024, at the invitation of the School of Management, Assistant Professor Gao Chao from the College of Business and Economics at the Australian National University gave an academic lecture titled "Near Is Dear: Remoteness, Soft Information, and Stock Returns" in the School of Management's Lecture Hall 210. This lecture was the 19th session of the 2024 Overseas Expert Lecture Series at the School of Management, chaired by Professor Su Kun, the head of the Accounting Department, with participation from some faculty and graduate students of the Accounting Department.

During the lecture, Gao Chao pointed out that the headquarters of a company serves as the central hub for information exchange between the company and the market, especially regarding soft information beyond quarterly earnings and any other mandatory disclosures. Existing literature has primarily focused on the significant role of the headquarters' location in investor preferences, information flow, corporate behavior, and governance. However, the impact of the remote geographical location of a company's headquarters on information dissemination and asset pricing has been largely understudied. To address this gap, Gao Chao used a vast amount of data on headquarters locations and population to construct a general measure of remoteness for adjacent companies in the United States, filling this void. Gao Chao noted that the research results indicate that geographical proximity plays a significant role in the dissemination of soft information. Consistent with the theory of information friction, on a risk-adjusted basis, the stock returns of companies headquartered in remote areas are 8.59% higher per year than those in adjacent areas, with a high degree of persistence. This pattern of returns is not driven by the nature of the business but is mitigated by the geographical dispersion of operations. The drift after earnings announcements is concentrated in remote companies, further highlighting the role of soft information in price discovery.

Gao Chao's research sparked widespread discussion among the faculty and students present, with exchanges on the content of the lecture, including variable definitions and data acquisition. Su Kun provided a summary for the lecture. The lecture was met with a warm response from the faculty and students, greatly promoting and stimulating everyone's enthusiasm and interest in scientific research.

[Written by Zhang Miaomiao, Reviewed by Shao Jing and Zhang Shuang]

Introduction to the Speaker:

Gao Chao graduated from Purdue University in the United States in 2019. He is currently a Senior Lecturer (Assistant Professor) at the College of Business and Economics, Australian National University. His research interests include information and markets, financial derivatives, empirical corporate finance, and institutional investors. His research findings have been published in the Journal of Financial and Quantitative Analysis, Financial Management, The Journal of Fixed Income, and Journal of Portfolio Management. He has served as a peer reviewer for journals such as Management Science, Journal of Banking and Finance, and Journal of Empirical Finance.