This study examines the impact of institutional investors' equity ownership stability and their investment horizon to determine the impact on their investee firms' equity mispricing. We treat institutional investors as a heterogenous group, i.e., dedicated, transient, or quasi-indexer as defined by Bushee (1998, 2001) since their categorization determines their trading strategy. Higher institutional ownership, higher stability in institutional investors' equity ownership, and institutional investors classified as long-term are all associated with lower equity mispricing at investee firms.
Sakaki, Hamid; Jory, Surendranath; and Jackson, Dave, "Institutional Investors’ Ownership Stability and Their Investee Firms’ Equity Mispricing" (2019). Economics and Finance Faculty Publications and Presentations. 69.