Institutional Presence *
نویسنده
چکیده
Does being located near institutional investors benefit corporations? We examine whether the ‘presence’ of local institutional investors, as measured by the equity assets under management of local institutions, reduces information asymmetry in the stock market. Firms in high institutional presence areas experience higher liquidity, faster information incorporation, lower costs of equity capital, and less financing frictions relative to firms in low institutional presence areas. Being located near institutional investors does not increase exposure to price or liquidity shocks. These patterns remain after controlling for firm characteristics (e.g., institutional ownership, firm fixed effects) and geographical features (e.g., urban locality, area fixed effects).
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