Preprint Case Report Version 1 Preserved in Portico This version is not peer-reviewed

The Correlation and Causality Research between Baidu Index and Stock price: An Empirical Study in China Solar Energy Industry

Version 1 : Received: 21 December 2018 / Approved: 25 December 2018 / Online: 25 December 2018 (08:39:05 CET)

How to cite: Huang, J.; Zeng, Y.; Chen, S.; Tang, S.; Gong, X.; Li, C. The Correlation and Causality Research between Baidu Index and Stock price: An Empirical Study in China Solar Energy Industry. Preprints 2018, 2018120297. https://doi.org/10.20944/preprints201812.0297.v1 Huang, J.; Zeng, Y.; Chen, S.; Tang, S.; Gong, X.; Li, C. The Correlation and Causality Research between Baidu Index and Stock price: An Empirical Study in China Solar Energy Industry. Preprints 2018, 2018120297. https://doi.org/10.20944/preprints201812.0297.v1

Abstract

Chinese investors are easily affected by hot topics on the media and Internet and likely take irrational behavior. They tend to consume rationally and invest emotionally. This research aims to analyze the Baidu index’s effect on share price of solar power industry in China. Three main models are established to identify the correlation between Baidu index and stock price of solar industry. The media index and searching index of Baidu are chosen as an independent variable to measure the influence from media and Internet, and stock price as the dependent variable. To improve and complete the analysis, Hexun index is taken into consideration as mediator variable. This study applied Multiple Linear Regression Model and VAR (Vector auto-regression) Model. The research mainly uses the tools of SPSS, Eviews and Excel to conduct data analysis. The test is based on the theories of Granger Causality, unit root test, F-test, and t-test. The research proves the relationship between the close price of stock and Baidu index, and it also created a model for further forecasting.

Keywords

Baidu index; media index; Hexun index; solar power industry; close price

Subject

Social Sciences, Psychology

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