Competition and Incentive to Reveal Information in Financial Markets

Sitikantha Parida
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引用次数: 1

Abstract

In this paper I study the impact of competition in financial markets on incentive to reveal information. In a sample of mutual funds, I find that discretionary portfolio disclosure and advertising related expenses decrease with competition. This is interesting, as one would ordinarily expect funds to disclose more often and incur more advertising expenses in response to pressure from competing funds. However, this supports the theory that mutual funds use discretionary portfolio disclosure and advertising as marketing tools to attract new investments in a financial market, where superior relative performance and greater visibility are rewarded with convex payoffs. With higher competition, the likelihood of landing new investments goes down for each fund and at the same time the cost of disclosure goes up. Funds respond by cutting down on costly discretionary disclosure of portfolio holding information and advertising related activities. Thus competition seems to have adverse impact on market transparency and search cost.
金融市场信息披露的竞争与激励
本文研究了金融市场竞争对信息披露激励的影响。在一个共同基金的样本中,我发现自由裁量的投资组合披露和广告相关费用随着竞争而减少。这很有趣,因为人们通常会期望基金更频繁地披露信息,并招致更多的广告费用,以应对来自竞争基金的压力。然而,这支持了一种理论,即共同基金利用可自由支配的投资组合披露和广告作为营销工具,在金融市场上吸引新的投资,在金融市场上,卓越的相对业绩和更大的可见度会获得凸回报。随着竞争加剧,每只基金获得新投资的可能性下降,同时披露的成本上升。基金的应对之策是,减少对投资组合持有信息和广告相关活动进行成本高昂的酌情披露。因此,竞争似乎对市场透明度和搜索成本产生了不利影响。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
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