Abstract

http://ssrn.com/abstract=1105962
 
 

References (35)



 
 

Citations (1)



 


 



Financial Networks and Trading in Bond Markets


Umit G. Gurun


University of Texas at Dallas - Naveen Jindal School of Management

G. Geoffrey Booth


Michigan State University - Department of Finance

Harold H. Zhang


University of Texas at Dallas - Naveen Jindal School of Management; China Academy of Financial Research (CAFR)

September 10, 2009


Abstract:     
This paper examines how financial networks influence asset prices and trading performance. Consistent with theoretical studies on the role of communication networks in information dissemination, we posit that financial institutions with more extensive financial networks can more efficiently acquire and process information pertaining to asset trading thus have better trading performance than financial institutions with limited financial networks. Using transaction-level Turkish government bond trading data, we find that financial institutions with global financial networks exhibit a stronger tendency to trade in the more liquid bonds and consistently trade at more favorable prices suggesting that global financial institutions have information advantages. They enjoy better trading performance than local financial institutions on informed trades. The information advantage afforded global financial institutions tends to decline over time suggesting possible learning by local financial institutions as a result of trading with global financial institutions.

Number of Pages in PDF File: 40

Keywords: Global Financial Networks, Information, Bond

JEL Classification: G15, G21, F21

working papers series


Download This Paper

Date posted: March 17, 2008 ; Last revised: September 16, 2009

Suggested Citation

Gurun, Umit G. and Booth, G. Geoffrey and Zhang, Harold H., Financial Networks and Trading in Bond Markets (September 10, 2009). Available at SSRN: http://ssrn.com/abstract=1105962 or http://dx.doi.org/10.2139/ssrn.1105962

Contact Information

Umit G. Gurun (Contact Author)
University of Texas at Dallas - Naveen Jindal School of Management ( email )
P.O. Box 830688
Richardson, TX 75083-0688
United States
G. Geoffrey Booth
Michigan State University - Department of Finance ( email )
315 Eppley Center
East Lansing, MI 48824-1122
United States
(517) 353-1745 (Phone)
(517) 432-1080 (Fax)
Harold Huibing Zhang
University of Texas at Dallas - Naveen Jindal School of Management ( email )
P.O. Box 830688
Richardson, TX 75083-0688
United States
China Academy of Financial Research (CAFR)
1954 Huashan Road
Shanghai P.R.China, 200030
China

Feedback to SSRN


Paper statistics
Abstract Views: 1,114
Downloads: 203
Download Rank: 86,213
References:  35
Citations:  1

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo1 in 0.328 seconds