You can actually guess how well a company's stock will do just by looking at how bright the streetlights are around their headquarters.
March 20, 2026
Original Paper
Nighttime light and the cost of equity: Evidence from the information channel
SSRN · 6443955
The Takeaway
Using satellite data of nighttime light intensity around Chinese firms, researchers found that higher light levels correlate with a lower cost of equity. This is because nearby residents act as an accidental information channel, inadvertently leaking signals about a company's health to the market before official data is released.
From the abstract
This paper investigates how information held by nearby residents, proxied by nighttime light intensity around the firm, affects the firm’s cost of equity. Using novel satellite-derived nighttime light data matched with Chinese A-share listed firms from 2012 to 2020, we find that the nighttime light intensity around a firm is negatively associated with its cost of equity. Mechanism analysis reveals that increased nighttime light intensity lowers the cost of equity by enhancing investor attention,