Firm Disclosure and Individual and Institutional Investors

46 Pages Posted: 14 Apr 2020 Last revised: 17 Nov 2023

See all articles by Stefan Anchev

Stefan Anchev

BI Norwegian Business School

Jörgen Hellström

Umeå University - Umeå School of Business and Economics

Rickard Olsson

Umea School of Business, Economics and Statistics, Umeå University

Date Written: October 31, 2022

Abstract

We provide empirical evidence consistent with the hypothesis that the disclosures of firms temporarily increase the information asymmetries between individual and institutional investors, where the former are at an information disadvantage relative to the latter. Moreover, institutional investors seem to gain their information advantage because they are more able to bear the costs of extracting private information from firm disclosures. For the same reason, these investors appear to earn higher short-term returns than individual investors. Overall, these findings suggest that firms' disclosures are, at least temporarily, of a lower informational value to individual investors than they are to institutional investors.

Keywords: Firm disclosure, individual and institutional investors, disclosure-processing costs, information asymmetry

Suggested Citation

Anchev, Stefan and Hellström, Jörgen and Olsson, Rickard, Firm Disclosure and Individual and Institutional Investors (October 31, 2022). Available at SSRN: https://ssrn.com/abstract=3557246 or http://dx.doi.org/10.2139/ssrn.3557246

Stefan Anchev (Contact Author)

BI Norwegian Business School ( email )

Nydalsveien 37
Oslo, 0484
Norway
+4746410661 (Phone)

HOME PAGE: http://tinyurl.com/stefananchev

Jörgen Hellström

Umeå University - Umeå School of Business and Economics ( email )

Umea, 90187
Sweden
+46-90-7866987 (Phone)

HOME PAGE: http://www.usbe.umu.se/english/about/staff/?languageId=1&uid=johe0001

Rickard Olsson

Umea School of Business, Economics and Statistics, Umeå University ( email )

Samhallsvetarhuset, Plan 2
Umea University
Umeå, SE 901 87
Sweden
+46 907865166 (Phone)
+46 907866674 (Fax)

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