Journal of Financial and Quantitative Analysis Vol. 57 No. 6 2022

The Geography of Information Acquisition

Honghui Chen^1,2; Yuanyu Qu^1,3,4,2,5; Tao Shen^1,3,4,2,5; Qinghai Wang^1,3,4,2,5; David Xu^1,3,4,2,5

¹ University of Central Florida · ² Florida College · ³ University of International Business and Economics · ⁴ Southern Methodist University · ⁵ Tsinghua University

Abstract

Using detailed data on company visits by Chinese mutual funds, we provide direct evidence of mutual fund information acquisition activities and the consequent informational advantages mutual funds establish in local firms. Mutual funds are more likely to visit local and nearby firms both in and outside of their portfolios, but the ease of travel between fund and firm locations can substantially alleviate geographic distance constraints. Company visits by mutual funds are strongly associated with both fund trading activities and fund trading performance. Our results show that geographic constraints and costly information acquisition amplify information asymmetry in financial markets.

DOI

10.1017/s002210902200045x

Volume

57

Issue

6

Pages

2251-2285

Language

en

Sources

bibtex:phds-export.bib openalex crossref

Cite

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