Finance Faculty Publications and Presentations
Document Type
Article
Publication Date
4-2020
Abstract
Previous literature finds a positive association between short-term changes in institutional holdings (especially those of local institutions) and subsequent short-term stock performance. We contribute by investigating the importance of geographical proximity under policy uncertainty. We show that the short-term informational advantage of local institutions only thrives in areas that are either politically closely aligned with the president or where the state government (governorship and legislature) is under the control of one party. Our findings are important in understanding the avenues through which geographical proximity may provide the basis for exploitable informational advantages.
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Publication Title
Journal of Banking & Finance
Recommended Citation
Aabo, T., Lee, S., Pantzalis, C. and Park, J.C., 2020. Know thy neighbor: Political uncertainty and the informational advantage of local institutional investors. Journal of Banking & Finance, 113, p.105762. https://doi.org/10.1016/j.jbankfin.2020.105762
Comments
Original published version available at https://doi.org/10.1016/j.jbankfin.2020.105762