Investor-firm private interactions and informed trading: Evidence from New York City taxi patterns

• 成果类型: Article
• 署名作者: Kirk, Marcus; Piao, Zhenhao Jeffery
• 署名单位: State University System of Florida; University of Florida; University of Missouri System; University of Missouri Columbia
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-024-09845-5
• 发表日期: 2025
• 页码: 1136-1174
• 关键词: institutional investors; stock returns; information asymmetry; earnings; management; disclosure; preferences; environment; forecasts; location

摘要

This study investigates when institutional investors seek on-site meetings with their portfolio firms and the subsequent informativeness of their trading decisions. We identify private interactions by creating and validating a novel measure based on the taxi traffic between an institutional investor's business office and its investee's headquarters. This measure allows a more granular unit of analysis and better control for investor-specific characteristics correlated with investors' private access. We find institutional investors allocate efforts to meetings with portfolio firms to shape expectations and gain investment advantages through these private interactions. Investors' trades are more informed when there are more private interactions with investee firms. Consistent with public information leveling the playing field, cross-sectional results suggest that institutional investors' returns from private information acquisition mainly concentrate in firms with opaque information environments. Overall, this study suggests that private interactions with public firms reward institutional investors with information that improves their trading decisions.