This study intends to analyze a potential connection between the number of Google searches and Euronext stock returns, considering also the impact that investor sentiment has on stock returns. For this purpose, we analyzed Euronext companies’data from 2017 to 2021, using the Generalized Method of Moments (GMM) methodology. The results show that the number of Google searches had no significant impact on Euronext stock returns. However, the evidence suggests that investor sentiment has a negative association with Euronext stock returns, meaning that good investment opportunities are found and the highest returns are obtained in periods of extreme pessimism. Therefore, the results of this study can have significant implications for private and institutional investors that invest in Euronext shares, providing insight that can help the decision-making process. This article is original because it analyzes the impact that the number of Google searches has on the Euronext stock exchange, and because no similar study for this financial market existed before. The same applies to investor sentiment. Lastly, the GMM methodology was employed as a method to improve the empirical analysis accounting for endogeneity, providing more robust results.
Loading....