Abstract
In this study, we investigate the significance of supply-chain relationships for institutional investors. We find that supply-chain relationships are an important determinant of institutional ownership – an institution that owns a customer firm is five times more likely than other institutions to also have an ownership stake in the firm’s supplier. Further, institutions experience abnormal trading profits in supplier firms. Trading profits are concentrated in small suppliers with negative future abnormal performance, consistent with institutional investors trading on negative information shocks across the supply chain. Robustness tests help to support a conclusion that supply-chain relationships provide a rich source of information through which institutions realize abnormal trading profits.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
