Journal article
The Price of Street Friends: Social Networks, Informed Trading, and Shareholder Costs
Journal of financial and quantitative analysis, v 51(3), pp 801-837
Jun 2016
Abstract
Recent studies suggest the transfer of privileged information via social ties but do not explicitly examine the cost of these ties to shareholders. We document a significant positive relation between stock transaction costs and a company’s social ties to the investment community. Social ties based on education and leisure activities, stronger ties, and ties to individuals responsible for trading have greater effects. Using investment connection deaths as natural experiments, we document that exogenous severance of ties reduces trading costs and trading activities by connected parties. Our evidence illustrates an important and previously undocumented consequence of social ties.
Metrics
Details
- Title
- The Price of Street Friends: Social Networks, Informed Trading, and Shareholder Costs
- Creators
- Jie Cai - Drexel UniversityRalph A. Walkling - Drexel UniversityKe Yang - Lehigh University
- Publication Details
- Journal of financial and quantitative analysis, v 51(3), pp 801-837
- Publisher
- Cambridge University Press
- Number of pages
- 37
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Finance
- Web of Science ID
- WOS:000382854200004
- Scopus ID
- 2-s2.0-84980349446
- Other Identifier
- 991019168421204721
InCites Highlights
Data related to this publication, from InCites Benchmarking & Analytics tool:
- Collaboration types
- Domestic collaboration
- Web of Science research areas
- Business, Finance
- Economics