Fund investor cliques and flow sensitivity—evidence from China

Xueting Guo, Weichun Ma, Xiaotong Liu and Yan Mo

Finance Research Letters, 2023, vol. 58, issue PB

Abstract: Although fund investor cliques have received widespread attention, their motives have not been thoroughly explored. We use a sample of actively managed open-end public equity funds in China during 2006 - 2020 to construct fund investor cliques. We then empirically examine the effect of fund flow characteristics on fund investor cliques. The empirical results show that the tendency of fund investor to clique is more pronounced when fund flows are more sensitive to fund performance. We also construct Reliance on Public Information (RPI) indicator as an instrumental variable to address the endogeneity problem in the empirical process.

Keywords: Public funds; Fund investor cliques; Fund flow sensitivity; RPI (search for similar items in EconPapers)
JEL-codes: G14 G23 G32 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:58:y:2023:i:pb:s1544612323008358

DOI: 10.1016/j.frl.2023.104463

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