Information interruption and hedge fund performance: Evidence from lockdown

Han Han, Zhibin Wang and Xueqing Zhao

Economics Letters, 2024, vol. 238, issue C

Abstract: This paper uses the COVID-19 outbreak as an exogenous shock to study the impact of information interruption on economic activities, particularly on hedge fund performance. Employing a difference-in-differences approach, we find that hedge funds preferring site visits experience a decline in performance and an increase in the failure risk during lockdowns. Additionally, we discover that physical interactions provide valuable soft information, irreplaceable by virtual communication. Our findings highlight the value of face-to-face interaction in information acquisition.

Keywords: Information interruption; Economic activities; Physical interactions; Soft information (search for similar items in EconPapers)
JEL-codes: G14 G23 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:238:y:2024:i:c:s0165176524001782

DOI: 10.1016/j.econlet.2024.111695

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