Based on the theory of social network, this paper studies the relationship between institutional investor clique and audit quality. Existing literature has found that institutional investors and ...audit quality are positively correlated.
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Based on the data of Shanghai and Shenzhen A-share listed companies from 2010 to 2020, this paper examines the relationship between institutional investor clique and audit quality. The result shows that the higher the ratio of shares held by institutional investor clique, the higher the audit quality. The influence mechanism shows that institutional investor clique can affect audit quality by alleviating information asymmetry. The mechanism provides new empirical evidence for the governance effect of institutional investor clique and contributes to understand the governance effect of institutional investor clique.
This study constructs a mediation effect model and empirically analyses the relationship between corporate litigation risk, institutional investor shareholding and ESG performance using data from ...Shanghai and Shenzhen A-share listed companies. The results show that corporate litigation risk significantly negatively impacts ESG performance, while institutional investor shareholding plays an important mediating role. This finding reveals the intrinsic mechanism of corporate litigation risk affecting ESG performance and provides new perspectives and ideas for theoretical research and practical guidance in related fields.
Liquidity shocks and institutional investors Dang, Tung Lam; Moshirian, Fariborz; Zhang, Bohui
The North American journal of economics and finance,
January 2019, 2019-01-00, Volume:
47
Journal Article
Peer reviewed
This paper investigates the role of institutional investors in amplifying market liquidity shocks during the global financial crisis of 2008–2009. We find that stocks with high pre-crisis ...institutional ownership experienced significant institutional holding reductions and larger price reductions during the crisis period. More importantly, this effect is pronounced for stocks with greater liquidity exposure to market liquidity shocks. Further analysis reveals that the institutional investors’ contribution to the amplification of liquidity shocks clusters primarily on non-block and/or independent institutional investors, who were more likely to encounter liquidity constraints during the crisis.
There is evidence to suggest that cross-border acquisitions by emerging market firms exhibit a wave-like pattern. In this paper, we examine the timing of cross-border acquisitions with a strategic ...asset-seeking motive within cross-border acquisition waves. Our findings suggest that emerging market firms are more likely to pursue acquisitions with a strategic asset-seeking motive during the early and decline phases of the wave, and lower during the wave peak. Further, we show that business group affiliation and foreign institutional shareholding moderate the relationship, thereby strengthening the propensity to pursue strategic asset-seeking acquisitions during the early phase of the wave. Our study based on a sample of 312 cross-border acquisitions conducted by Indian firms, provides support for our hypotheses.
This study examines whether the effectiveness of institutional monitoring depends on the economic conditions of emerging capital markets. We use trading volume data by investor type to compute a ...proxy for total institutional ownership. We then analyze the impact of the proxy variable on accounting earnings attributes and examine whether the association between the two depends on an expectation of market growth. We find that the effect of institutional monitoring decreases when market growth is expected to be low, implying that market growth may be a critical determinant of institutional investors' long-term monitoring effectiveness in emerging capital markets.
This study investigates the influence of China's national team investors on stock market volatility and crash risks using 2011-2018 data. Findings show increased stock return volatility and decreased ...crash risks post-2015. The national team reduced risk for pledged shares, while treatment firms reduced R&D investment and diversified business more than control groups. A difference-in-difference approach reveals heightened volatility in firms with national team ownership after 2015, questioning the efficacy of these interventions. This research offers insights into government intervention in financial markets, emphasizing the national team's impact on market stability and economic outcomes.
•Higher institutional ownership is associated with a lower frequency of market manipulation, supporting the monitoring effect of institutional investors.•The effect of institutional ownership on ...market manipulation persists even when we instrument index reconstitutions as an exogenous determinant of institutional ownership.•The effect of institutional ownership on market manipulation is driven by reduced information asymmetries resulting from the oversight of institutional investors.•The monitoring effects are more pronounced for long-term institutional investors and concentrated institutional investors.
Employing a sample of suspected stock manipulation cases based on intraday data, we find that higher institutional ownership is associated with a lower frequency of market manipulation, supporting the monitoring effect of institutional investors. This effect persists even when we instrument index reconstitutions as an exogenous determinant of institutional ownership. Further, our findings indicate that this effect is driven by reduced information asymmetries resulting from the oversight of institutional investors. Moreover, the empirical evidence suggests that the monitoring effects are more pronounced for long-term institutional investors and concentrated institutional investors.
This paper investigates the effects of institutional investor horizons on investment efficiency in China. By analysing 26,831 firm‐year observations from Chinese listed companies, we find that ...long‐term (short‐term) institutional ownership is negatively (positively) associated with the level of inefficient investments. A battery of robustness tests indicates causality. Further analyses reveal that the rise in environmental uncertainty and information asymmetry are transmission channels for increased inefficient investments. Moreover, we find that the single controlling shareholder and state owner can curb the management myopia induced by short‐term institutional investors while they do not impede the monitoring effort of long‐term institutional investors.
Abstract
This paper constructs an institutional investor network based on the heavy holdings of the same stock in China and conducts a social network analysis to investigate the influence of this ...network on stock price volatility from the perspectives of network structure (density) and location (centrality). The study demonstrates that institutional investor network density is negatively related to stock price volatility, while network centrality is positively related to it. Mechanism analyses further reveal that network density reduces stock price volatility by mitigating private information arbitrage behavior among institutional investors, whereas network centrality increases stock price volatility by creating private information arbitrage opportunities within the network. Additionally, the paper finds that information asymmetry enhances the positive effect of network centrality on stock price volatility. These findings are generally consistent across subsample analyses for different market states, reactions to good and bad news, and types of equity ownership, as well as in other robustness tests. The practical implications of these findings are significant for market stability regulation.
