Abstract

http://ssrn.com/abstract=2141878
 
 

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Corporate Jets and Private Meetings with Investors


Brian J. Bushee


University of Pennsylvania - The Wharton School

Joseph Gerakos


University of Chicago - Booth School of Business

Lian Fen Lee


Boston College - Carroll School of Management

January 24, 2014

Chicago Booth Research Paper No. 12-43

Abstract:     
We use corporate jet flights to “money centers” to identify periods in which mangers are likely to be engaging in private, face-to-face meetings with investors. We predict that such meetings enable select investors to supplement and trade on their private information, leading to price and volume reactions during the flight periods. Using a sample of almost 400,000 flights undertaken by 396 firms between 2007 and 2010, we find evidence consistent with money center flights being used to communicate privately with investors. First, we find that the number of flights to money center cities is significantly associated with a number of proxies for incentives to meet privately with investors. Second, we find that three-day windows including money center flights exhibit significantly greater information content than windows with only flights to other cities. Third, we find that the size-adjusted returns surrounding flights to multiple money centers are, on average, positive. Overall, our evidence suggests that these private meetings are an important information event for the participating investors, who potentially gain an advantage over nonparticipating investors who have no public notice of the meetings.

Number of Pages in PDF File: 53

Keywords: Selective disclosure, Corporate jets, Institutional investors

JEL Classification: G14

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Date posted: September 5, 2012 ; Last revised: January 29, 2014

Suggested Citation

Bushee, Brian J. and Gerakos, Joseph and Lee, Lian Fen, Corporate Jets and Private Meetings with Investors (January 24, 2014). Chicago Booth Research Paper No. 12-43. Available at SSRN: http://ssrn.com/abstract=2141878 or http://dx.doi.org/10.2139/ssrn.2141878

Contact Information

Brian J. Bushee
University of Pennsylvania - The Wharton School ( email )
3641 Locust Walk
Philadelphia, PA 19104-6365
United States
215-898-4872 (Phone)
215-573-2054 (Fax)

Joseph J. Gerakos (Contact Author)
University of Chicago - Booth School of Business ( email )
5807 S. Woodlawn Ave.
Chicago, IL 60637
United States
773-834-6882 (Phone)
Lian Fen Lee
Boston College - Carroll School of Management ( email )
140 Commonwealth Avenue
Chestnut Hill, MA 02467
United States
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