{"status":"ok","message-type":"work","message-version":"1.0.0","message":{"indexed":{"date-parts":[[2026,10,22]],"date-time":"2026-10-22T17:42:15Z","timestamp":1792690935066,"version":"4.5.0"},"posted":{"date-parts":[[2026]]},"group-title":"SSRN","reference-count":0,"publisher":"Elsevier BV","license":[{"start":{"date-parts":[[2026,1,1]],"date-time":"2026-01-01T00:00:00Z","timestamp":1767225600000},"content-version":"unspecified","delay-in-days":0,"URL":"https:\/\/creativecommons.org\/licenses\/by\/4.0\/"}],"content-domain":{"domain":[],"crossmark-restriction":false},"short-container-title":[],"abstract":"<jats:p>We ask whether investors follow a pecking order of investment across the claims of a single firm as a function of their sensitivity to information about the firm. Distant investors allocate less to a firm and, within it, choose less information-sensitive claims than local investors. We use the COVID-19 lockdowns, which cut off local investors' access to soft information, to separate the two reasons an investor might avoid sensitive claims: imprecise information of her own, or the risk of trading against someone better informed. We predict and document that a loss of local information alone leaves distant investors' choices unchanged, whereas lower adverseselection costs raise their willingness to invest in more sensitive securities, and more so where the holder base was more local. This portfolio reallocation and reduction in information asymmetry among investors improves the firm liquidity. The shift is larger where public information resolves less about the firm and smaller where the debt structure is complex. Information asymmetry among investors, not only between the firm and the market, shapes who holds which claim.<\/jats:p>","DOI":"10.2139\/ssrn.7655438","type":"posted-content","created":{"date-parts":[[2026,10,22]],"date-time":"2026-10-22T17:05:41Z","timestamp":1792688741000},"source":"Crossref","is-referenced-by-count":0,"title":["Pecking Order Theory and Portfolio Choice\u00a0"],"prefix":"10.2139","author":[{"given":"Jun Kyung","family":"Auh","sequence":"first","affiliation":[],"role":[{"vocabulary":"crossref","role":"author"}]},{"given":"Massimo","family":"Massa","sequence":"additional","affiliation":[],"role":[{"vocabulary":"crossref","role":"author"}]}],"member":"78","container-title":[],"original-title":[],"deposited":{"date-parts":[[2026,10,22]],"date-time":"2026-10-22T17:05:41Z","timestamp":1792688741000},"score":1,"resource":{"primary":{"URL":"https:\/\/www.ssrn.com\/abstract=7655438"}},"subtitle":[],"short-title":[],"issued":{"date-parts":[[2026]]},"references-count":0,"URL":"https:\/\/doi.org\/10.2139\/ssrn.7655438","relation":{},"subject":[],"published":{"date-parts":[[2026]]},"subtype":"preprint"}}