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Do institutional investor cliques prefer supply chain transparency?

Author

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  • Li, Shi
  • Li, Meng
  • Ma, Leyao
  • Ding, Jing

Abstract

We examine the impact of supply chain transparency (SCT) on institutional investor cliques’ ownership. We find that institutional investors in cliques prefer firms with lower SCT, which reinforces their information advantage. The preference is more pronounced when the social distance among clique members is closer, aligning with the explanation that institutional investors acquire private information through social networks, leading to coordinated actions. Further, this preference is strengthened when a firm has greater market power or profitability. These results indicate that the non-financial information contained within undisclosed supply chains affects institutional investors' decision-making. We provide a fresh perspective and evidence on the formation of institutional investor cliques.

Suggested Citation

  • Li, Shi & Li, Meng & Ma, Leyao & Ding, Jing, 2025. "Do institutional investor cliques prefer supply chain transparency?," Economics Letters, Elsevier, vol. 248(C).
    • Handle: RePEc:eee:ecolet:v:248:y:2025:i:c:s0165176525000837
    DOI: 10.1016/j.econlet.2025.112246
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    Keywords

    Supply chain transparency; Institutional investors; Network clique; Private information;
    All these keywords.

    JEL classification:

    • D53 - Microeconomics - - General Equilibrium and Disequilibrium - - - Financial Markets
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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