Investor Diversity and Liquidity in The Secondary Loan Market

We find strong evidence that investor diversity is beneficial to loan liquidity: More diverse syndicates, as measured by the number of investor-types or the concentration of loan shares by investor-type, hold loans that have lower quoted bid-ask spreads in the secondary market. These results are rob...

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Detalles Bibliográficos
Autores principales: Santos, João A. C., Shao, Pei
Formato: Online Artículo Texto
Lenguaje:English
Publicado: Springer US 2022
Materias:
Article
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8989259/
http://dx.doi.org/10.1007/s10693-022-00377-0
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author Santos, João A. C.
Shao, Pei
author_facet Santos, João A. C.
Shao, Pei
author_sort Santos, João A. C.
collection PubMed
description We find strong evidence that investor diversity is beneficial to loan liquidity: More diverse syndicates, as measured by the number of investor-types or the concentration of loan shares by investor-type, hold loans that have lower quoted bid-ask spreads in the secondary market. These results are robust, and do not appear to be driven by investors’ borrower/loan selection. Further, they are not driven by the presence of any particular type of investors. Our findings are consistent with Goldstein and Yang (J Financ 70:1723–1765 2015) insight that there is a strategic complementarity between different groups in trading on their information and producing information.
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spelling pubmed-89892592022-04-11 Investor Diversity and Liquidity in The Secondary Loan Market Santos, João A. C. Shao, Pei J Financ Serv Res Article We find strong evidence that investor diversity is beneficial to loan liquidity: More diverse syndicates, as measured by the number of investor-types or the concentration of loan shares by investor-type, hold loans that have lower quoted bid-ask spreads in the secondary market. These results are robust, and do not appear to be driven by investors’ borrower/loan selection. Further, they are not driven by the presence of any particular type of investors. Our findings are consistent with Goldstein and Yang (J Financ 70:1723–1765 2015) insight that there is a strategic complementarity between different groups in trading on their information and producing information. Springer US 2022-04-07 2023 /pmc/articles/PMC8989259/ http://dx.doi.org/10.1007/s10693-022-00377-0 Text en © The Author(s), under exclusive licence to Springer Science+Business Media, LLC, part of Springer Nature 2022 This article is made available via the PMC Open Access Subset for unrestricted research re-use and secondary analysis in any form or by any means with acknowledgement of the original source. These permissions are granted for the duration of the World Health Organization (WHO) declaration of COVID-19 as a global pandemic.
spellingShingle Article
Santos, João A. C.
Shao, Pei
Investor Diversity and Liquidity in The Secondary Loan Market
title Investor Diversity and Liquidity in The Secondary Loan Market
title_full Investor Diversity and Liquidity in The Secondary Loan Market
title_fullStr Investor Diversity and Liquidity in The Secondary Loan Market
title_full_unstemmed Investor Diversity and Liquidity in The Secondary Loan Market
title_short Investor Diversity and Liquidity in The Secondary Loan Market
title_sort investor diversity and liquidity in the secondary loan market
topic Article
url https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8989259/
http://dx.doi.org/10.1007/s10693-022-00377-0
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