Title: The Cost of Being Close: Fund-Broker Relationships and Information Acquisition

Speaker: Jing Ding, Associate Professor, Tongji University

Host: Xiangwei Wan, Associate Professor, Antai College of Economics and Management, Shanghai Jiao Tong University

Time: 13:30–15:00, Wednesday, June 10, 2026

Venue: Room 306, Haoran Building, Xuhui Campus, Shanghai Jiao Tong University

Brief introduction of the content: 

Nearly all corporate site visits attended by mutual fund managers are conducted jointly with brokerage firms. We study how fund-broker relationships shape the informativeness of these visits. While site visits are informative on average, their incremental informativeness declines sharply with relationship strength, reflected in weaker trading responses and lower subsequent trading profits. Instrumenting relationship strength with geographic proximity and local social interaction culture yields similar results. The negative effect of relational closeness is strongest for firms with greater information asymmetry and for funds with more severe agency problems. Around a 2023 reform introducing per-broker commission caps, this pattern does not materially weaken. Together, the evidence is consistent with a relational distortion mechanism, in which entrenched relationships weaken incentives for costly information production.

Speaker's profile:

Jing Ding is an Associate Professor at the School of Economics and Management, Tongji University. She received her Ph.D. in Finance from the School of Economics and Management, Tsinghua University. She was a visiting scholar at the University of Toronto and Washington University in St. Louis. Her research interests include mutual funds, market microstructure, and real estate. She has served as Principal Investigator for a Young Scientist Project of the National Natural Science Foundation of China (NSFC). Her work has been published in leading journals such as American Economic Review: Insights, Management Science, Journal of Financial and Quantitative Analysis, and Journal of Management Sciences in China.

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