Chasing Noise or Recognizing Value:An Empirical Study on Information Seeking Behavior of Chinese Investment Funds
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| Title | Chasing Noise or Recognizing Value:An Empirical Study on Information Seeking Behavior of Chinese Investment Funds
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| Author | Zhang Zongxin and Yang Tongmin |
| Organization | Fudan University |
| Email | zhangzongxin@fudan.edu.cn； |
| Key Words | Mutual funds; Information mining; Fundamental information; Private information |
| Abstract | Recent years, speculation behavior of Chinese investment funds has raised doubts about its investment behavior and professional competence. This paper, by investigating the information seeking mechanism of investment funds, analyzes the essence and logic behind the heterogeneous behavior above. By distinguishing firms with different informational characteristics and different level of firm information, our results show that: investment funds have acquired valuable fundamental information of firms they invest and gained private information through their strong information seeking ability. However, this kind of information seeking mechanism is only seen in the sample of large firms with better information environment and less fundamental variability. As for the small firms, while the investment funds have sought for firm specific information, they do not exhibit focus on fundamental information, showing that they are speculating based on noise. |
| Serial Number | WP626 |
| Time | 2014-08-05 |
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