scholarly journals Institutional Investors and Information Acquisition: Implications for Asset Prices and Informational Efficiency

2017 ◽  
Author(s):  
Matthijs Breugem ◽  
Adrian Buss
Keyword(s):  
Institutional Investors ◽  
Information Acquisition ◽  
Asset Prices ◽  
Informational Efficiency

scholarly journals Institutional Investors and Information Acquisition: Implications for Asset Prices and Informational Efficiency

2018 ◽  
Vol 32 (6) ◽  
pp. 2260-2301 ◽  
Author(s):  
Matthijs Breugem ◽  
Adrian Buss
Keyword(s):  
Institutional Investors ◽  
Information Acquisition ◽  
Asset Prices ◽  
Informational Efficiency

Informational Efficiency and Liquidity Premium as the Determinants of Capital Structure

2010 ◽  
Vol 45 (2) ◽  
pp. 401-440 ◽  
Author(s):  
Chun Chang ◽  
Xiaoyun Yu
Keyword(s):  
Capital Structure ◽  
Information Acquisition ◽  
Operating Efficiency ◽  
Informational Efficiency ◽  
Information Revelation ◽  
Security Prices ◽  
Liquidity Premium ◽  
Maximum Information ◽  
Informed Traders ◽  
Operating Decisions

AbstractThis paper investigates how a firm’s capital structure choice affects the informational efficiency of its security prices in the secondary markets. We identify two new determinants of a firm’s capital structure policy: the liquidity (adverse selection) premium due to investors’ anticipated losses to informed trading, and operating efficiency improvement due to information revelation from the firm’s security prices. We show that the capital structure decision affects traders’ incentives to acquire information and subsequently, the distribution of informed traders across debt and equity claims. When information is less imperative for improving its operating decisions, a firm issues zero or negative debt (i.e., holding excess cash reserves) in order to reduce socially wasteful information acquisition and the liquidity premium associated with it. When information is crucial for a firm’s operating decisions, the optimal debt level is one that achieves maximum information revelation at the lowest possible liquidity cost. Our model can explain why many firms consistently hold no debt. It also provides new implications for financial system design and for the relationship among leverage, liquidity premium, profitability, and the cost of information acquisition.

scholarly journals Institutional Investors’ Corporate Site Visits and Firms’ Sustainable Development

2020 ◽  
Vol 12 (17) ◽  
pp. 7036
Author(s):  
Yize Hu ◽  
Jun Shan ◽  
Peixun Zhan
Keyword(s):  
Sustainable Development ◽  
Institutional Investors ◽  
Information Acquisition ◽  
Stock Exchange ◽  
Manufacturing Firms ◽  
Econometric Analysis ◽  
Environmental Investment ◽  
The Government ◽  
The Impact

Institutional investors are essential stakeholders of the firm, and they care about firms’ sustainable development. In this study, we focused on a prevalent and essential type of information acquisition activity of institutional investors: corporate site visits, which refers to their trip to the firms’ headquarters and factories. We investigated the impact of institutional investors’ corporate site visits on firms’ likelihood of environmental violation. Using Chinese listed manufacturing firms in the Shenzhen Stock Exchange from 2009 to 2017, the econometric analysis shows that institutional investors’ corporate site visits significantly decrease firms’ likelihood of environmental violation. Moreover, this effect is more pronounced for firms in heavily polluting industries, firms not owned by the government, and firms with less institutional shareholding. Furthermore, we show that institutional investors’ corporate site visits prevent environmental violations by increasing firms’ environmental investment. Our study highlights the importance of institutional investors’ corporate site visits by showing that they are beneficial to the firms visited.

Short-sale constraints, information acquisition, and asset prices

2017 ◽  
Vol 172 ◽  
pp. 273-312 ◽  
Author(s):  
Mahdi Nezafat ◽  
Mark Schroder ◽  
Qinghai Wang
Keyword(s):  
Information Acquisition ◽  
Asset Prices ◽  
Short Sale Constraints ◽  
Short Sale

scholarly journals Costly Information Acquisition, Social Networks, and Asset Prices: Experimental Evidence

2019 ◽  
Vol 74 (4) ◽  
pp. 1975-2010 ◽  
Author(s):  
EDWARD HALIM ◽  
YOHANES E. RIYANTO ◽  
NILANJAN ROY
Keyword(s):  
Social Networks ◽  
Experimental Evidence ◽  
Information Acquisition ◽  
Asset Prices ◽  
Costly Information
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