We argue that institutional brokerage networks facilitate liquidity provision and mitigate the price impact of large non-information-motivated trades. Using commissions, we map trading networks of mutual funds (institutions) and their brokers. Central funds (institutions) tend to outperform their peripheral counterparts in terms of return gap (execution shortfall). This outperformance is more pronounced when funds experience large outflows and for large trades in less liquid stocks. Central brokers can deliver superior trade execution compared to peripheral brokers, but mainly for central institutions. We use the collapse of Lehman Brothers as a quasi-natural experiment to establish the likely causality of our findings. (JEL G14, G23, G24)

中文翻译：

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机构经纪网络：促进流动性供应


我们认为，机构经纪网络有助于提供流动性并减轻大型非信息驱动交易的价格影响。通过佣金，我们绘制了共同基金（机构）及其经纪人的交易网络。中央基金（机构）在回报差距（执行缺口）方面往往优于外围基金。当基金出现大量资金流出以及流动性较差的股票进行大量交易时，这种优异表现更为明显。与外围经纪商相比，中央经纪商可以提供卓越的交易执行，但主要针对中央机构。我们利用雷曼兄弟的倒闭作为准自然实验来确定我们的发现可能存在的因果关系。 (JEL G14、G23、G24)