How do institutional investors facilitate reporting comparability? Evidence from common institutional ownership in the United States

• 成果类型: Article
• 署名作者: Li, Xuanbo; Lou, Yun; Wang, Rencheng; Zhou, Kaitang
• 署名单位: City University of Hong Kong; Singapore Management University; Wuhan University
• 刊物名称: CONTEMPORARY ACCOUNTING RESEARCH
• ISSN/ISSBN: 0823-9150
• DOI: 10.1111/1911-3846.13028
• 发表日期: 2025
• 页码: 1176-1211
• 关键词: accounting comparability; auditor style; stock-prices; governance; FIRMS; determinants; COMPETITION; networks; FUTURE

摘要

We examine how common institutional investors (CIIs) facilitate the financial reporting comparability (FRC) of US firms. Common ownership increases FRC of firms that are directly owned by CIIs (via a direct effect) and has positive spillover effects on other firms in the same industry. We find spillover effects in two types of firms: (1) those that are commonly owned by different institutional investors but are connected through common firms, and (2) those that do not have any common ownership. These results suggest that the effect of common ownership goes beyond commonly owned firms and extends to non-commonly owned firms. Furthermore, we find two mechanisms for the direct and spillover effects of common ownership on reporting comparability: firms' hiring of common auditors and their adoption of similar accounting practices. Overall, we provide comprehensive evidence on how common institutional ownership benefits the comparability of financial reporting in the United States.