I Theme: Who Hate and Who Love the Leveling of the Playing Field?

II Speaker: Wang Ying, a PhD in finance graduating from Nanyang Technological University, furthered her Postdoctoral research at INSEAD in 2013 and now works as a lecturer at the School of Finance in Central University of Finance and Economics. Her research fields include asset pricing, corporate finance, corporate regulation, institutional regulator, merge and acquisition, social responsibility of corporates and so on. Her paper has participated seminars including 2012 25th Australasian Finance and Banking Conference (Both PhD Forum and main conference), 2012 National Taiwan University International Conference on Finance and 2013 China Financial International Conference.

III Time: December 21, 2015 (Monday), 12:00-13:00

IV Venue: Meeting Room 702, Academic Auditorium

V Host: Dong Bingbing, lecturer from School of Finance, Central University of Finance and Economics

Abstract: We find that institutional trading in aggregate cannot positively predict stock returns after 2000, suggesting that institutional investors as a group no longer have an information advantage after the adoption of Regulation Fair Disclosure (Reg FD). Furthermore, we show that both the short-term and local institutional investors, who are documented to have an information advantage over their counterparts, lose their advantage in post-Reg FD period. By contrast, institutional investors who have skills in generating precise private information from public sources demonstrate a persistent and even greater information advantage. Last, we find that skilled institutional investors change their appetite for the information advantage to large and value stocks in post-Reg FD period. These findings imply that institutional investors rely heavily on selective disclosure to possess private information while Reg FD effectively levels the playing field and blocks their backdoors. Only the information advantage created from open sources is sustainable on the leveled playing field. Consequently, skilled institutional investors love the leveling of playing field but non-skilled institutional investors hate that.