Exploring information demand in the maritime industry: a Google Trends approach

The fundamental impetus for this research is the documented wide use of Google and the ensuing applications of Google Trends in behavioural economics. Expanding the existing literature, we focus on addressing the question of whether information demand from individual investors can reflect a freight rates sentiment. This is achieved by analysing Google queries referring to investment in maritime stocks and other related markets. These searches comprise essentially a blend of information and intuition. More specifically, we examine whether the most frequently searched term and topic referred to Baltic Dry Index (BDI) can serve as a reliable and valid positive or negative sentiment market proxies. We find a negative impact on freight rates, capital markets, and the number of available dry bulk fleet, providing evidence aligned with the risk-averse investor theory. We unveil bidirectional interactions between our sentiment index and the two out of three examined maritime markets, supporting the rejection of the efficient market hypothesis. Our study also verifies the similar effects of information demand and media-produced sentiment indexes on the corresponding market. We succeed in confirming sentiment's predictability out-of-sample for BDI. Beyond the academic value, our findings suggest a manner of enhancing the accuracy of freight rates predictions for practitioners.