Institutional Investors Heterogeneity, Future Earnings and the Informativeness of Stock Prices

This paper test the effects of different institutional investors on the extent to which stock prices reflect future earnings. The study find that the extent to which stock prices reflects future earnings increases with the institutional ownership. but further divided into types of institutional investors, only pressure-resistant institutional investors can significantly enhance the in formativeness of stock prices for future earnings while pressure-sensitive institutional investors cannot. So it can be said that the incremental impact of institutional investors on the extent to which stock prices reflect future earnings due to pressure-resistant institutional investors.