Time: 10:30am-12:30pm,Augest 5th, Wednesday
Addr: IFS Conference Room (Guanghua Campus)
Topic: Investment in a Smaller World
Speaker: Mitch Warachka professor at Claremont Mckenna College
Mitch Warachka is associate professor at the Clement Mckenna College now,and used to be associate professor at Singapore Management university from 2009 to 2012. He received the PhD degree from Cornell University of Finance in 2000. Professor Mitch Warachka Interested research field are: asset pricing, corporate governance and derivatives. Professor Mitch Warachka has published academic papers on many outstanding international journal like: Journal of Financial Econometrics, Journal of Financial Economics.
The CV of Mitch Warachka professor and more details about Professor Warachka as below: https://www.cmc.edu/academic/faculty/profile/mwarachka
Air travel has made the world smaller. We find that institutional investors allocate a larger fraction of their portfolios to firms headquartered at destinations with greater air traffic from their location. In particular, air travel mitigates local investment biases. Air travel also facilitates corporate mergers and acquisitions involving distant firms. Furthermore, an increase in the number of airline passengers flying to a destination is associated with nearby firms having a more geographically disperse investor base and a lower cost of equity (Merton, 1987). These conclusions are confirmed by exogenous route initiations and cancelations induced by the opening of air hubs. Overall, air travel improves the diversification of investor por Tfolios while lowering the cost of equity for firms.
Contact: Ye Dan, Zhang Bohuai