Institutional investor distraction and stock price synchronicity

Taiyun Zhou and Gang Yao

Accounting and Finance, 2025, vol. 65, issue 2, 1888-1907

Abstract: This article examines the relation between institutional investor distraction and stock price synchronicity using extreme industry returns as an exogenous shock to investor attention. We find that institutional investor distraction is negatively associated with the quantity of firm‐specific information incorporated into stock prices. Underlying mechanisms that lead to our results are the decremental disclosure of valuable information and reduced efficiency of information dissemination. Further analyses imply that the negative impact of institutional investor distraction is more pronounced for firms with weaker internal control and lower market competition. This stock price synchronicity significantly increases financial constraints and weakens investment horizons.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/acfi.13393

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:acctfi:v:65:y:2025:i:2:p:1888-1907

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0810-5391

Access Statistics for this article

Accounting and Finance is currently edited by Robert Faff

More articles in Accounting and Finance from Accounting and Finance Association of Australia and New Zealand Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().