@article{731c43ea770644ee983bdfbc216bfbd1,
title = "Governance through trading: Institutional swing trades and subsequent firm performance",
abstract = " Using unique daily fund-manager trade data, we examine the role of institutional trading in influencing firm performance. We show that short-horizon informed trading by multiple institutional investors effectively disciplines corporate management. Our focus is on short-term swing trades, sequences with three phases (e.g., buy-sell-buy). We find swing trades increase stock price informativeness, are profitable after costs, and improve market efficiency. This increase in stock price informativeness is associated with subsequent firm outperformance. Trades are most beneficial with optimal stock holdings that reflect the information acquisition incentives of investors as well as liquidity costs.",
author = "Gallagher, {David R.} and Gardner, {Peter A.} and Swan, {Peter L.}",
note = "Funding Information: We thank an anonymous referee for excellent insights and helpful comments and Doug Foster for his detailed feedback. We also thank Renee Adams, Jonathan Cohn, Alex Edmans (to whom we owe particular thanks), David Feldman, Ron Giammarino, Jarrad Harford, Craig Holden, Andr{\'e} Levy, Paul Malatesta (the editor), Ernst Maug, Mark Seasholes, Jianfeng Shen, Lesley Walter, Terry Walter, Geoff Warren, John Wei, and seminar participants at the European Finance Association Conference in Bergen, Norway, China International Finance Conference, 2009, Financial Integrity Research Network Research Day, University of Sydney Microstructure Meeting, University of Western Australia, University of Queensland, University of Adelaide, Reserve Bank of Australia, and Australasian Finance and Banking Conference. We gratefully acknowledge research funding from the Australian Research Council (DP0346064).",
year = "2013",
month = apr,
doi = "10.1017/S0022109013000203",
language = "English",
volume = "48",
pages = "427--458",
journal = "Journal of Financial and Quantitative Analysis",
issn = "0022-1090",
publisher = "Cambridge University Press",
number = "2",
}