We investigate the role of mutual fund flows in incorporating market sentiment into asset prices. We show that retail investors adjust their investments among mutual fund categories in response to changes in market sentiment. Consistent with sentiment-induced price pressure through fund flows,...

We provide evidence that publicly listed firms respond to capital supply conditions shaped by local investing preferences. The local supply of credit is higher and more stable in areas where demographics suggest that local investors prefer safer portfolios. We find that firms headquartered in...

In this study, we investigate the significance of supply-chain relationships for institutional investors. We find that supply-chain relationships are an important determinant of institutional ownership – an institution that owns a customer firm is five times more likely than other institutions...