Independent Institutional Investors and Equity Returns
We find that the positive relation between institutional ownership and future equity returns documented in previous studies is driven by independent institutions. Independent institutional trading predicts future stock returns and is positively related to future earnings surprises. This predictability does not reverse in the long run. In contrast, grey institutions (institutional investors that have existing or potential business relationships with firms in which they invest) have no such predictive power. We also show that independent institutions predictive power comes from their superior ability to produce private information about the firms instead of their willingness to monitor: (1) the predictive power of independent institutional trading exists only among firms with high information production costs, but not among firms with low information production costs; (2) independent institutional trading is not associated with subsequent abnormal operating performance.
institutional ownership independent institutions information production monitoring earnings surprise operating performance
Yawen Jiao Mark H. Liu
Lally School of Management and Technology,Rensselaer Polytechnic Institute,Troy,NY 12180 Gatton College of Business and Economics,University of Kentucky,Lexington,KY 40506
国际会议
大连
英文
1-53
2008-07-02（万方平台首次上网日期，不代表论文的发表时间）