Mutual Fund Transparency and Corporate Myopia

• 成果类型: Article
• 署名作者: Agarwal, Vikas; Vashishtha, Rahul; Venkatachalam, Mohan
• 署名单位: University System of Georgia; Georgia State University; Duke University
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhx125
• 发表日期: 2018
• 页码: 1966
• 关键词: ABNORMAL RETURNS; stock returns; ceo turnover; performance; INVESTMENT; INNOVATION; MARKET; COSTS; RISK; SENSITIVITIES

摘要

Pressure from institutional money managers to generate profits in the short run is often blamed for corporate myopia. Theoretical research suggests that money managers' short-term focus stems from their career concerns and greater fund transparency can amplify these concerns. Using a difference-in-differences design around a regulatory shock that increased the transparency of fund managers' portfolio choices, we examine whether increased transparency encourages myopic corporate investment behavior. We find that corporate innovation declines following the regulatory shock. Moreover, evidence from mutual fund trading behavior corroborates that the increased short-term focus of money managers drives the results.