Ehsan Mahdikhani

I am a Ph.D. student in the Finance Department at the Stockholm School of Economics (SSE) and the Swedish House of Finance.

I will be on the 2025-2026 Job Market.

Job market paper: Breaching the Chinese Wall: Cross-Market Information Flow Following Financial Institution Mergers

Abstract: How does access to private loan information affect institutional investors' equity returns? Exploiting mergers between asset managers and lenders as a plausibly exogenous shock to loan-side information access, we find that after gaining access institutional investors earn higher abnormal equity returns: within institutions, managers earn 3.1 pp higher annualized returns on stocks for which they have loan-side access than on their other holdings without such access, and across institutions trading the same stock, informed managers outperform equity-only peers by 1.7 pp annualized, consistent with debt positions conferring information unavailable to pure shareholders. Mechanism tests show larger gains when financial-reporting covenants bind; where such covenants exist pre-merger, returns rise by roughly 2 pp. Firms with dual holders adjust: public voluntary disclosures decline by about 11%, new facilities are 11–17% more likely to include information-intensive covenants, and loan pricing improves. Public markets respond with wider bid–ask spreads. By comparing holdings with loan-side access to managers’ other positions and to uninformed holders of the same stock, the design isolates causal loan-to-equity information flow, linking mergers between equity- and lending-side entities to trading rents and to shifts in the public information environment.