Social Proximity to Capital: Implications for Investors and Firms

• 成果类型: Article
• 署名作者: Kuchler, Theresa; Li, Yan; Peng, Lin; Stroebel, Johannes; Zhou, Dexin
• 署名单位: New York University; National Bureau of Economic Research; Centre for Economic Policy Research - UK; Southwestern University of Finance & Economics - China; City University of New York (CUNY) System; Baruch College (CUNY)
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhab111
• 发表日期: 2022
• 页码: 2743
• 关键词: home bias; institutional investors; individual investors; retirement plan; cross-section; MARKET; networks; INFORMATION; portfolio; familiarity

摘要

We show that institutional investors are more likely to invest in firms from regions to which they have stronger social ties but find no evidence that these investments earn a differential return. Firms in regions with stronger social ties to locations with many institutional investors have higher valuations and liquidity. These effects are largest for small firms with little analyst coverage, suggesting that the investors' behavior is explained by their increased awareness of firms in socially proximate locations. Our results highlight that the social structure of regions affects firms' access to capital and contributes to geographic differences in economic outcomes.