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Big Data Finance and Financial Markets

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Big Data in Computational Social Science and Humanities

Part of the book series: Computational Social Sciences ((CSS))

Abstract

Financial markets are always the most aggressive adopters of new information technologies. The recent boom in big data has enhanced the effect of information diffusion in financial markets since the physical cost of participation has been reduced and interactions among investors have become more efficient. In this chapter, we provide an overview of the current state of the art related to the utilization of big data in financial markets. To start with, we introduce the concept of financial big data from the perspective of complementing our understanding of the predictability and dynamics of financial markets as well as illustrating the changing landscape from conventional media to big data in academic research. Secondly, we summarize the medium effects of financial big data on the efficient market hypothesis and the market dynamics, respectively. Thirdly, we further probe into the underlying mechanisms as to why financial big data exhibits superior predictability and explanatory power for the market dynamics. Finally, this chapter outlines the challenges and promising avenues for future research.

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Acknowledgement

The first author is grateful for the research support in the form of National Natural Science Foundation of China (Grant number: 71701150 and 71320107003), whereas the second author is grateful for the research support in the form of Ministry of Science and Technology (MOST) Grants, Taiwan, MOST 106-2410-H-004-006-MY2.

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Authors and Affiliations

  1. College of Management and Economics, Tianjin University, Tianjin, China

    Dehua Shen

  2. AI-ECON Research Center, Department of Economics, National Chengchi University, Taipei, Taiwan

    Shu-Heng Chen

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  1. Dehua Shen
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  2. Shu-Heng Chen
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Correspondence to Dehua Shen .

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Editors and Affiliations

  1. AI-ECON Research Center, Department of Economics, National Chengchi University, Taipei, Taiwan

    Shu-Heng Chen

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Shen, D., Chen, SH. (2018). Big Data Finance and Financial Markets. In: Chen, SH. (eds) Big Data in Computational Social Science and Humanities. Computational Social Sciences. Springer, Cham. https://doi.org/10.1007/978-3-319-95465-3_12

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  • DOI: https://doi.org/10.1007/978-3-319-95465-3_12

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  • Publisher Name: Springer, Cham

  • Print ISBN: 978-3-319-95464-6

  • Online ISBN: 978-3-319-95465-3

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