Journal article
Investor Sophistication and the Mispricing of Accruals
Review of accounting studies, Vol.8(2-3), pp.251-276
06/01/2003
DOI: 10.1023/A:1024417513085
Abstract
This paper examines the role of institutional investors in the pricing of accruals. Using Bushee's (1998) classification of institutional investors, we show that firms with a high level of institutional ownership and a minimum threshold level of active institutional traders have stock prices that more accurately reflect the persistence of accruals. This result holds after controlling for differences in the persistence of accruals between firms with high and low institutional ownership, and after controlling for other characteristics that are correlated with institutional ownership and future returns. Additionally, firms with low institutional ownership are smaller, less profitable, and have lower share turnover, suggesting that limits to arbitrage impede institutional investors from exploiting the seemingly large abnormal returns for these firms. [PUBLICATION ABSTRACT]
Details
- Title: Subtitle
- Investor Sophistication and the Mispricing of Accruals
- Creators
- Daniel Collins - University of IowaGuojin Gong - University of IowaPaul Hribar - Cornell University
- Resource Type
- Journal article
- Publication Details
- Review of accounting studies, Vol.8(2-3), pp.251-276
- Publisher
- Springer Nature B.V
- DOI
- 10.1023/A:1024417513085
- ISSN
- 1380-6653
- eISSN
- 1573-7136
- Language
- English
- Date published
- 06/01/2003
- Academic Unit
- Accounting
- Record Identifier
- 9984380486802771
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