Mutual Fund Participation in Private In-house Meetings: Evidence from Firms Listed on the Shenzhen Stock Exchange

58 Pages Posted: 19 Feb 2020

See all articles by Robert M. Bowen

Robert M. Bowen

Chapman University - The George L. Argyros School of Business & Economics; University of Washington - Foster School of Business

Shantanu Dutta

University of Ottawa - Telfer School of Management

Songlian Tang

East China University of Science and Technology (ECUST)

PengCheng Zhu

University of San Diego

Date Written: January 20, 2020

Abstract

The Shenzhen Stock Exchange (SZSE) in China is unique worldwide in requiring disclosure of the timing, participants and selected content of private in-house meetings between firm managers and outside investors. We investigate whether these private meetings benefit hosting-firms and their major outside institutional investors, mutual funds. Using a large hand-collected dataset of SZSE firms, we find that mutual funds with relatively large ownership in the hosting firm (i) have more access to private in-house meetings, particularly those meetings that reveal negative information, (ii) interact more often with top management, (iii) attend more exclusive meetings, and (iv) have longer meetings with hosting firms. When mutual funds with relatively large ownership attend negative news meetings, firms tend to experience lower post-meeting stock return volatility. This finding suggests that allowing managers and select institutional investors to discuss negative developments in a private setting – possibly to provide elaboration and manage the news – helps minimize stock sell-offs and mitigate stock return volatility.

Keywords: Institutional investors, mutual funds, private in-house meetings, site visits, disclosure, stock volatility

JEL Classification: G14, G15, G18, G23, G34, G38

Suggested Citation

Bowen, Robert M. and Dutta, Shantanu and Tang, Songlian and Zhu, Phil, Mutual Fund Participation in Private In-house Meetings: Evidence from Firms Listed on the Shenzhen Stock Exchange (January 20, 2020). Available at SSRN: https://ssrn.com/abstract=3524559 or http://dx.doi.org/10.2139/ssrn.3524559

Robert M. Bowen (Contact Author)

Chapman University - The George L. Argyros School of Business & Economics ( email )

333 N. Glassell
Orange, CA 92866
United States
206.334.0911 (Phone)

HOME PAGE: http://www.chapman.edu/our-faculty/robert-bowen

University of Washington - Foster School of Business ( email )

Box 353226
University of Washington
Seattle, WA 98195-3226
United States
206.334.0911 (Phone)

HOME PAGE: http://foster.uw.edu/faculty-research/directory/robert-bowen/

Shantanu Dutta

University of Ottawa - Telfer School of Management ( email )

136 Jean-Jacques Lussier Street
Ottawa, Ontario K1N 6N5
Canada

Songlian Tang

East China University of Science and Technology (ECUST) ( email )

Shanghai
China

Phil Zhu

University of San Diego ( email )

5998 Alcala Park
San Diego, CA 92110
United States

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