Relationship networks in the stock lending market and information leakage

• Grant number: 22/00329-1
• Support Opportunities: Scholarships abroad - Research
• Start date: July 01, 2022
• End date: December 31, 2022
• Field of knowledge: Applied Social Sciences - Economics
• Principal Investigator: Bruno Cara Giovannetti
• Grantee: Bruno Cara Giovannetti
• Host Investigator: Bernard Herskovic
• Host Institution: Escola de Economia de São Paulo (EESP). Fundação Getúlio Vargas (FGV). São Paulo , SP, Brazil
• Institution abroad: University of California, Los Angeles (UCLA), United States

Abstract

Brokers have a privileged position in the information flow in decentralized markets. First, we will estimate relationship networks between brokers and investors in the Brazilian stock lending market - our dataset has all operations in the Brazilian stock lending market between the years 2012 and 2019. Then, we will investigate whether clients who are better related to the brokers receive information from these brokers at the time of their trades. We will use difference-in-difference analysis to answer this difficult and important question. (AU)