The informational role of institutional investors and financial analysts in the market

Chuang, Wen-I; Lee, Bongsoo

doi:10.1016/j.finmar.2010.12.001

Cited by 15 publications

(12 citation statements)

References 31 publications

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“…We attribute this result to the tendency of stocks with a low level of institutional ownership to react to information more slowly than the high institutional ownership stocks. Such results are consistent with previous studies that explored whether lead-lag effects arise due to differences in institutional investments across portfolios in the NYSE (see Bardinath et al, 1995;Sias and Starks, 1997;Chuang and Lee;. This suggests the level of institutional investment in equities can influence the speed of adjustment and give rise to lead-lag effects in international stock markets, regardless of whether they are developed or emerging (even in their very early stages of development).…”

Section: Discussionsupporting

confidence: 91%

“…We also find in all quintiles that the mean institutional ownership increases with firm size, implying that institutional investors favour large capitalised stocks over small capitalised stocks. This pattern is also found by Chuang and Lee (2011). This provides an opportunity to test whether institutional ownership has an independent influence on the crossautocorrelation patterns.…”

Section: Data and Preliminary Statisticssupporting

confidence: 54%

“…One explanation offered for these lead-lad effects is variation in institutional ownership between stocks. 2 Data analyses of stock returns from the New York Stock Exchange (NYSE) provide strong support for this hypothesis (Badrinath et al 1995;Sias and Starks, 1997;Chuang and Lee, 2011). Sias and Starks (1997) review various theoretical attempts to explain how the presence of institutional investors affects the behaviour of stock prices.…”

Section: Introductionmentioning

confidence: 99%

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Lead-lag relationships in an embryonic stock market: Exploring the role of institutional ownership and liquidity

Arjoon

Bougheas

Milner

2016

Research in International Business and Finance

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This paper investigates the influence of institutional ownership and liquidity on stock return relationships for an embryonic and relatively illiquid stock market. Using daily, individual stock data for Trinidad and Tobago from 2001 to 2012 and a VAR modelling approach, we find for firms of all sizes and levels of analyst coverage that the returns of more institutionally favoured stocks lead those with less institutional ownership. Distinctively, greater institutional coverage is shown not to be associated with greater liquidity, though liquidity levels do condition the influence of institutional ownership. This indicates that institutional owners have information advantages relative to other stock owners.JEL Classification: G14, G23

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Section: Discussionsupporting

confidence: 91%

Section: Data and Preliminary Statisticssupporting

confidence: 54%

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Lead-lag relationships in an embryonic stock market: Exploring the role of institutional ownership and liquidity

Arjoon

Bougheas

Milner

2016

Research in International Business and Finance

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“…The improved information environment and quality of external monitoring result from the involvement of mutual funds in ownership may enhance creditability and allow firms to borrow more. Active trading by the mutual funds is also expected to lead to more efficient pricing and higher sensitivity to marketwide information (Chuang and Lee 2011). This leads us to the following hypothesis:…”

Section: Institutional Investor Shareholding and Capital Structurementioning

confidence: 99%

Capital structure of Chinese listed SMEs: an agency theory perspective

2016

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Prior work examining the antecedents of capital structure for small and medium-sized enterprises in emerging markets is limited. This paper sheds light on how the corporate governance mechanisms adopted by firms on the newly established Growth Enterprise Market (GEM) in China influence their use of debt. We find that the financial leverage of GEM firms is positively influenced by executives' shareholding and their excess cash compensation. Ownership concentration appears to reduce leverage, whereas the percentage of tradable shares increases leverage. In contrast, institutional investors' shareholding does not influence the level of debt. Traditional factors such as tax and operating cash flow are insignificant in explaining the debt levels among GEM firms.

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“…An analysis of the definitions "securities market" and "stock market" provided in the economic literature [8,9,17] suggests that as a rule, the authors do not mention considerable differences that would indicate fundamental substantive aspects of their essence. As a matter of fact, they reflect a virtually identical approach to understanding the essence of both the stock market and the securities market as a set of economic relations regarding the issue and circulation of securities as a specific commodity sold in a separate segment of the financial market.…”

Section: Resultsmentioning

confidence: 99%

The mechanism of integration of the Ukrainian stock market in the world stock market

2020

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The article is devoted to structuring and improving the methodological foundations of the mechanism of state regulation of the stock market. Priority directions for the development of the stock market are determined in order to strengthen its role in stabilization of the national economy. As a result, a structural and functional model of stock market operation in the system of economic development of the country was elaborated. It involves ensuring the legitimate access of national companies to the global stock markets while attracting foreign investors to the Ukrainian stock market. The authors argue that the mechanism of the national stock market integration involves several stages: from enhancing international cooperation primarily with the stock markets of countries that are strategic partners, subsequent full participation in regional and subregional integration associations of stock markets, up to global integration in the world stock market as a priority direction for the development of the domestic stock market in the context of stabilization of the national economy.

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The informational role of institutional investors and financial analysts in the market

Cited by 15 publications

References 31 publications

Lead-lag relationships in an embryonic stock market: Exploring the role of institutional ownership and liquidity

Lead-lag relationships in an embryonic stock market: Exploring the role of institutional ownership and liquidity

Capital structure of Chinese listed SMEs: an agency theory perspective

The mechanism of integration of the Ukrainian stock market in the world stock market

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