An empirical study of the relationship between the stock discussion board's posting numbers and stock trading volume

The stock discussion board is becoming an important public forum because of its fast speed, wide influence, large amount of information and high group pertinence. The bloom in the stock discussion board exerts a positive influence on the stock market. This paper sets the amount of posting on stock discussion board as a proxy of information flows. And after the empirical analysis of sample data, we find that the number of postings is positively related to stock trading volume. This relation remains after the control of the fundamentals of individual stock, such as firm sizes, and the positive relation is significantly stronger among lower proportion of institutional shareholdings. The finding of positive correlation contributes to reducing the investors' liquidity risk and providing caution for the regulation of the stock discussion board.