Investor competition over information and the pricing of information asymmetry

Whether the information environment affects the cost of capital is a fundamental question in accounting and finance research. Relying on theories about competition between informed investors as well as the pricing of information asymmetry, we hypothesize a cross-sectional variation in the pricing of...

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Main Authors: Atkins, Brian K., NG, Jeffrey, Verdi, Rodrigo
Format: text
Language:English
Published: Institutional Knowledge at Singapore Management University 2012
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Online Access:https://ink.library.smu.edu.sg/soa_research/876
https://ink.library.smu.edu.sg/context/soa_research/article/1875/viewcontent/SSRN_id1858906.pdf
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Institution: Singapore Management University
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spelling sg-smu-ink.soa_research-18752017-03-24T03:14:32Z Investor competition over information and the pricing of information asymmetry Atkins, Brian K. NG, Jeffrey Verdi, Rodrigo Whether the information environment affects the cost of capital is a fundamental question in accounting and finance research. Relying on theories about competition between informed investors as well as the pricing of information asymmetry, we hypothesize a cross-sectional variation in the pricing of information asymmetry that is conditional on competition. We develop and validate empirical proxies for competition using the number and concentration of institutional investor ownership. Using these proxies, we find a lower pricing of information asymmetry when there is more competition. Overall, our results suggest that competition between informed investors has an important effect on how the information environment affects the cost of capital. 2012-01-01T08:00:00Z text application/pdf https://ink.library.smu.edu.sg/soa_research/876 info:doi/10.2308/accr-10157 https://ink.library.smu.edu.sg/context/soa_research/article/1875/viewcontent/SSRN_id1858906.pdf http://creativecommons.org/licenses/by-nc-nd/4.0/ Research Collection School Of Accountancy eng Institutional Knowledge at Singapore Management University Information Risk Information Quality Asset Pricing Accounting Corporate Finance
institution Singapore Management University
building SMU Libraries
continent Asia
country Singapore
Singapore
content_provider SMU Libraries
collection InK@SMU
language English
topic Information Risk
Information Quality
Asset Pricing
Accounting
Corporate Finance
spellingShingle Information Risk
Information Quality
Asset Pricing
Accounting
Corporate Finance
Atkins, Brian K.
NG, Jeffrey
Verdi, Rodrigo
Investor competition over information and the pricing of information asymmetry
description Whether the information environment affects the cost of capital is a fundamental question in accounting and finance research. Relying on theories about competition between informed investors as well as the pricing of information asymmetry, we hypothesize a cross-sectional variation in the pricing of information asymmetry that is conditional on competition. We develop and validate empirical proxies for competition using the number and concentration of institutional investor ownership. Using these proxies, we find a lower pricing of information asymmetry when there is more competition. Overall, our results suggest that competition between informed investors has an important effect on how the information environment affects the cost of capital.
format text
author Atkins, Brian K.
NG, Jeffrey
Verdi, Rodrigo
author_facet Atkins, Brian K.
NG, Jeffrey
Verdi, Rodrigo
author_sort Atkins, Brian K.
title Investor competition over information and the pricing of information asymmetry
title_short Investor competition over information and the pricing of information asymmetry
title_full Investor competition over information and the pricing of information asymmetry
title_fullStr Investor competition over information and the pricing of information asymmetry
title_full_unstemmed Investor competition over information and the pricing of information asymmetry
title_sort investor competition over information and the pricing of information asymmetry
publisher Institutional Knowledge at Singapore Management University
publishDate 2012
url https://ink.library.smu.edu.sg/soa_research/876
https://ink.library.smu.edu.sg/context/soa_research/article/1875/viewcontent/SSRN_id1858906.pdf
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