The price of the slow lane: Traffic congestion and stock block trading premium

Tingqiu Cao, Xianhang Qian and Le Zhang

International Review of Finance, 2024, vol. 24, issue 1, 30-52

Abstract: Using data on city‐level daily traffic congestion and stock block trading, we investigate the impact of trader cities' traffic congestion on the stock block trading price. We find that higher level of traffic congestion in the traders' cities is associated with lower stock block trading premium, particularly when the information asymmetry between the trading parties is high. We also find that the buyers have more bargaining power in determining the price premium of block trading. Moreover, we employ a multi‐pronged approach to address the identification issue and find confirming evidence for the causal link.

Date: 2024
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https://doi.org/10.1111/irfi.12432

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International Review of Finance is currently edited by Bruce D. Grundy, Naifu Chen, Ming Huang, Takao Kobayashi and Sheridan Titman

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