Does the research done by the institutional investors affect the stock price synchronicity?

Les recherches menées par les investisseurs institutionnels influencent-elles la synchronicité des cours boursiers ?

Fateh Saci ()
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Fateh Saci: CHROME - Détection, évaluation, gestion des risques CHROniques et éMErgents (CHROME) - Nîmes Université - UNIMES - Nîmes Université, UMay - Université de Mayotte (UMay)

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Abstract: This study examines the extent and manner in which institutional investors' on-site visits influence stock price synchronicity. We analyzed data from all A-share listed companies on the Shenzhen Stock Exchange and listed firms in France for the period 2008–2019, to investigate the relationship between institutional investors' on-site visits and stock price synchronicity. The findings reveal that: (1) the presence of on-site visits significantly decreases stock price synchronicity; (2) there is a negative correlation between the frequency of visits by investigators and institutions and a given firm's stock price synchronicity, although the effects of heterogeneity are not statistically significant; (3) both site inspections and engagements with senior management demonstrate an inconsequential negative correlation with stock price synchronicity. Nevertheless, when these two elements are present concurrently, the behavior of visiting significantly elevates stock price synchronicity. These results provide both theoretical and empirical evidence supporting the premise that institutional investors regard on-site visits as an effective mechanism for scrutinizing firm information. Furthermore, the findings hold practical implications for investors, corporations, and regulatory bodies.

Keywords: Stock Price Synchronicity; Institutional Investors; On-site visits; Information Efficiency; Listed Companies (search for similar items in EconPapers)
Date: 2025-09-09
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Published in Journal of Asset Management, 2025, ⟨10.1057/s41260-025-00423-1⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-05253309

DOI: 10.1057/s41260-025-00423-1

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