The Boundary of Open Data: Implications for Financial Market and Real Efficiency

We study the optimal open data boundary and its implications in a model in which the participants from both financial markets and real sectors with private data have access to open data. Open data provides new information and expands the scale of growth opportunities by increasing productivity, but its public access incurs privacy costs. Therefore, there is an optimal boundary for the open data usage. Private data, as a source of information for financial market and real sector participants, has a substitute relationship with open data, thereby affecting the optimal boundary of open data. As a result, the optimal open data boundary is U-shaped in private data endowments. Because of the U-shaped relationship, private data endowment can affect financial market efficiency and real efficiency by directly providing private data and indirectly influencing the open data boundary, resulting in non-monotonic relationships of financial market efficiency and real efficiency with private data endowments.