Overview and details of the sessions of this conference. Please select a date or location to show only sessions at that day or location. Please select a single session for detailed view (with abstracts and downloads if available).
Please note that all times are shown in the time zone of the conference. The current conference time is: 19th May 2024, 05:02:29am CEST
Information Technology, Competition for Attention, and Corporate Efficiency
Zhiqiang Ye
IESE Business School, Spain
Discussant: Gabriela Stockler (NYU Abu Dhabi)
I study the effects of information technology (IT) progress in a model where stock prices aggregate speculators' information and guide firms' investments. A firm with higher exposure to risky production technology attracts more information from speculators. IT progress (i.e., lowering information costs) improves stock price informativeness and corporate efficiency when information is costly. Yet, when information is inexpensive, speculators use up their limited attention. Then IT improvements can backfire: Firms excessively increase risky technology exposure to engage in zero-sum competition for attention, reducing corporate efficiency and social welfare. Raising firms' growth opportunities can reinforce the adverse effects of IT progress.
Liquidity Transformation and Information Production: An Analysis of Mutual Funds’ Frozen Holdings
Clemens Sialm2, David Xu1
1SMU, United States of America; 2University of Texas at Austin and NBER
Discussant: Michela Verardo (London School of Economics)
This paper demonstrates that liquidity transformation provided by asset managers can boost firm-specific information production. We examine a setting where stocks become perfectly illiquid during trading suspensions: the prices and shares held by mutual funds “freeze.” Consistent with a model of liquidity-driven information acquisition, we find that investors analyze these illiquid holdings and reallocate capital in funds to take advantage of these stale prices. Once trading resumes, stocks exposed to liquidity transformation exhibit informative price movements about future firm fundamentals, reflecting the information produced by investors. Our findings suggest a liquidity channel through which asset management influences information production in capital markets.
