Bank dependence in emerging countries: Cross-border information percolation in mutual fund equity investing

• 成果类型: Article
• 署名作者: Allen, Linda; Chakraborty, Suparna; Hazarika, Sonali; Su, Chih-Huei
• 署名单位: City University of New York (CUNY) System; Baruch College (CUNY); University of San Francisco; University of Saint Thomas
• 刊物名称: JOURNAL OF INTERNATIONAL BUSINESS STUDIES
• ISSN/ISSBN: 0047-2506
• DOI: 10.1057/s41267-019-00273-1
• 发表日期: 2020
• 页码: 218-243
• 关键词: insider information; Syndicated bank loans; international mutual fund investing

摘要

In contrast to the literature involving U.S. bank domestic lending, we find that mutual funds affiliated with lending banks reduce their equity investment and turnover in the non-U.S.-listed stock of their non-U.S. borrowers compared to non-lending banks or unaffiliated mutual funds. Reduced equity holdings increase loan spreads, preserving the lending bank's cross-border information monopoly. Equity market holdings and turnover are reduced when banks lend to firms in emerging nations and when the geographic distance between the lender and the mutual fund manager is greatest. Thereby, long-range information percolation may benefit global institutions at the expense of individual subsidiaries.