@article{45f009cf9ab247b19843117ceeb8542a,
title = "Investor diversity and liquidity in the secondary loan market",
abstract = "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{\textquoteright} 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.",
keywords = "Informed investors, Investor diversity, Loan bid-ask spreads, Loan market liquidity, Loan syndicate",
author = "Santos, {Jo{\~a}o A.C.} and Pei Shao",
note = "Funding Information: The authors thank an anonymous referee, the editors, N. Prabhala and Haluk Unal, and Max Bruche, Yeejin Jang, and seminar participants at Cass Business School{\textquoteright}s Workshop on Corporate Debt Markets, Federal Reserve Bank of Cleveland, Nankai University School of Finance, Xi{\textquoteright}an Jiaotong University School of Economics and Finance, and the 2018 Chicago Financial Institutions Conference for valuable comments. The authors also thank Sooji Kim for outstanding research assistance. Pei Shao gratefully acknowledges financial support for this research from the Social Sciences and Humanities Research Council of Canada. The views stated herein are those of the authors and are not necessarily the views of the Federal Reserve Bank of New York, or the Federal Reserve System. Publisher Copyright: {\textcopyright} 2022, The Author(s), under exclusive licence to Springer Science+Business Media, LLC, part of Springer Nature.",
year = "2023",
month = jun,
doi = "10.1007/s10693-022-00377-0",
language = "English",
volume = "63",
pages = "249--272",
journal = "Journal of Financial Services Research",
issn = "0920-8550",
publisher = "Springer",
}