Overseeing Innovation

Glaeser, Chloe Kim; Glaeser, Stephen; Labro, Eva

doi:10.2139/ssrn.3605432

Cited by 3 publications

(3 citation statements)

References 103 publications

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“…Prior literature on geographic locations has documented that geographic proximity can reduce information acquisition costs (Covrig et al, 2007;Ivkovic and Weisbenner, 2005;John et al, 2011) and reduce monitoring costs (Anderson and Wincoop, 2004;Kalnins and Lafontaine, 2013). Reduction in travel time facilitates monitoring and therefore decreases misconduct (Heese and Perez-Cavazos, 2020) and increases productivity (Glaeser et al, 2020). Following this stream of arguments, we argue that information processing costs hamper the flow of firmspecific information and, therefore, are positively associated with stock synchronicity.…”

Section: Hypotheses Developmentmentioning

confidence: 63%

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Information processing costs and firm-specific information flows: evidence from the launch of high-speed railway in China

Zhao

2022

ARA

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PurposeThe findings suggest that reducing information processing costs as a result of better transportation is an important ingredient in promoting the pricing of firm-specific information. This study aims to discuss the aforementioned issue.Design/methodology/approachThe authors adopt a difference-in-difference (DID) research design to examine the impact of information processing costs on stock price synchronicity with a sample of firms listed in the Chinese A-share market during 2007 and 2017.FindingsThis paper shows that the launch of the high-speed railway (hereafter HSR) in China is associated with lower stock price synchronicity, consistent with the theory that the HSR reduces investors’ information processing costs (cost of monitoring, acquiring and analyzing firm disclosures). This effect is more pronounced for companies located in remote areas than for those located in large cities. Further tests show that the negative association between the launch of HSR and stock price synchronicity is stronger for companies with higher information asymmetries, proxied by higher equity concentration, higher complexity and lower internal control quality.Originality/valueThis study contributes to the literature in the following three ways. First, prior literature relates the effects of geographic distance to information transmission and information asymmetry between insiders and outside investors (e.g. Coval and Moskowitz, 2001; Kang and Kim, 2008; Malloy, 2005). The authors supplement the literature by providing new empirical evidence from an exogenous shock (natural experiment), that is, the launch of HSR, that facilitates transportation and reduces information transmission costs. Second, prior studies have shown that new airline routes that facilitate transportation improve investment and productivity (e.g. Bernstein et al., 2016; Giroud, 2013). The authors extend this stream of studies by showing that the development of HSR networks reduces information processing costs, and promotes the incorporation of firm-specific information in the asset pricing. More importantly, in this study, the authors explicitly incorporate disclosure processing costs theory into our framework thus enhancing our understanding of how and why improvements in transport relate to better market outcomes.

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Section: Hypotheses Developmentmentioning

confidence: 63%

“…, 2011) and reduce monitoring costs (Anderson and Wincoop, 2004; Kalnins and Lafontaine, 2013). Reduction in travel time facilitates monitoring and therefore decreases misconduct (Heese and Perez-Cavazos, 2020) and increases productivity (Glaeser et al. , 2020).…”

Section: Information Processing Costs and Hypotheses Developmentmentioning

confidence: 99%

Information processing costs and firm-specific information flows: evidence from the launch of high-speed railway in China

Zhao

2022

ARA

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“…(56) Rigorous community monitoring has shown that despite these adverse conditions, there have been relatively few cases of COVID-19 in Nairobi, Kisumu and Nakuru. (57) The impacts of the responses to COVID-19, as with historical responses to public health crises such as Ebola (in 2014), (58) H1N1 (in 2009) or SARS (in 2003) (59) -or even further back historically, the cholera pandemics in cities (for example in London and New York in the mid-19th century) (60) -are filtering through to built environment design, planning and building processes. In the initial weeks of the COVID-19 pandemic, much accusatory attention was directed towards highdensity urban areas and mobilities within such areas.…”

Section: Consequencesmentioning

confidence: 99%

COVID-19: what is not being addressed

Gupte¹,

Mitlin²

2020

Environment and Urbanization

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As the number of confirmed COVID-19 cases nears 27 million, there is a rush to answer (what next) and a rush to act (to solve the immediate problems of COVID-19). This paper discusses, with a specific focus on urban areas in the global South, what is missing to date from this response. That includes an identification of things that there are too much of, things that are not being done at all, and things that are unbalanced. There has been an enormous upsurge of academic research papers and opinions on COVID-19. “Technological” and “scientific” solutions tend to overshadow other approaches, even if people know that “social is important”. Based on our analysis to date, our primary concern is that there is too little understanding about the importance of building dialogue, exploring collaboration and co-producing solutions. There is too little understanding as to why social and cultural responses are important, and how the recognition that they are important can be actioned.

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