Abstract:

Our research compares the asymmetric information costs of firms with low levels of institutional ownership to those with high levels. We use self-tender offers as an information event. Our results show that higher institutional ownership, particularly a higher number of institutional investors, is associated with a lower degree of informed trading. These results persist even after we control for differences in trading activity among our sample firms.

Keywords: institutions; asymmetric information; block; G14/G20/G32

Document Type: Research article

DOI: 10.1111/1540-6288.00042

Affiliations: 1: University of Idaho 2: Western Michigan University