The effect of institutional ownership on firm transparency and information production

• 成果类型: Article
• 署名作者: Boone, Audra L.; White, Joshua T.
• 署名单位: Texas A&M University System; Texas A&M University College Station; Mays Business School; University System of Georgia; University of Georgia
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2015.05.008
• 发表日期: 2015
• 页码: 508-533
• 关键词: institutional investors; Indexing; information asymmetry; voluntary disclosure; EARNINGS FORECASTS

摘要

We examine the effects of institutional ownership on firms' information and trading environments using the annual Russell 1000/2000 index reconstitution. Characteristics of firms near the index cutoffs are similar, except that firms in the top of the Russell 2000 have discontinuously higher proportional institutional ownership than firms in the bottom of the Russell 1000 primarily due to indexing and benchmarking strategies. We find that higher institutional ownership is associated with greater management disclosure, analyst following, and liquidity, resulting in lower information asymmetry. Overall, indexing institutions' predilection for lower information asymmetries facilitates information production, which enhances monitoring and decreases trading costs. (C) 2015 Elsevier B.V. All rights reserved.