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Mr. Zhenhao (Jeffery) Piao
Ph.D. Candidate in Accounting
Fisher School of Accounting
Warrington College of Business
University of Florida

This study investigates the relation between institutional investors’ acquisition of private information through on-site meetings with public firms and the informativeness of their trading decisions conditioning on investors’ public information processing skills. Using the taxi traffic between an institutional investor’s office and the headquarters of its local investee as a novel proxy for private interactions, I find institutional investors benefit incrementally from private information acquisition. Institutional investors’ trades in local stocks are more informed when there is a higher degree of private interactions with local firms. Further, consistent with public information leveling the playing field by constraining investors’ returns from private information, results from cross-sectional tests suggest that institutional investors’ returns from private information acquisition mainly concentrate on firms with opaque information environments. Overall, this study suggests that private interactions with public firms reward institutional investors with information that improves their trading decisions.