Title
Institutional ownership, analyst following, and share prices
Abbreviated Journal Title
J. Bank Financ.
Keywords
Institutional ownership; Monitoring; Analysts; Financial intermediation; Share price level; Firm value; MUTUAL FUND PERFORMANCE; BID-ASK SPREADS; STOCK SPLITS; TOBIN-Q; PORTFOLIO DIVERSIFICATION; SHAREHOLDER ACTIVISM; CORPORATE GOVERNANCE; EQUITY PRICES; TICK SIZE; INVESTORS; Business, Finance; Economics
Abstract
We study the mutual relationships between institutional ownership, analyst following and share prices. We show that the pressure on firms to set lower share prices to attract analysts is attenuated by institutional monitoring. Our theory refutes the assumed causal relation between share price and institutional ownership, attributed to the share price-liquidity relation, and we show empirically that share prices and institutional ownership are positively related after controlling for liquidity. Our study provides a rationale for why better firms generally maintain higher share price levels, and offers new insights into the puzzling empirical linkages observed between nominal share price levels and firm fundamentals. (C) 2012 Elsevier B.V. All rights reserved.
Journal Title
Journal of Banking & Finance
Volume
36
Issue/Number
8
Publication Date
1-1-2013
Document Type
Article
Language
English
First Page
2175
Last Page
2189
WOS Identifier
ISSN
0378-4266
Recommended Citation
"Institutional ownership, analyst following, and share prices" (2013). Faculty Bibliography 2010s. 2620.
https://stars.library.ucf.edu/facultybib2010/2620
Comments
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