The Influence of Ownership Structure, Analyst Following and Institutional Infrastructure on Stock Price Informativeness: International Evidence

35 Pages Posted: 24 Sep 2014

See all articles by Jeong-Bon Kim

Jeong-Bon Kim

City University of Hong Kong

Li Jiang

Hong Kong Polytechnic University

Lei Pang

Hong Kong Baptist University (HKBU)

Date Written: September 2014

Abstract

Using firms from 20 non‐US countries, we investigate whether and how ownership structure, analyst following and country‐level institutions influence stock price informativeness (SPI). We find that stock price informativeness decreases with control‐ownership wedge (the detachment of voting rights from cash flows rights), and this SPI‐reducing effect of the wedge is attenuated for firms with high analyst following and in countries with strong country‐level institutions. We also find that stock price informativeness decreases with analyst following, but this SPI‐reducing effect of analyst following is attenuated in countries with strong country‐level institutions.

Keywords: Ownership structure, Stock price informativeness, Analyst following, Institutions

Suggested Citation

Kim, Jeong-Bon and Jiang, Li and Pang, Lei, The Influence of Ownership Structure, Analyst Following and Institutional Infrastructure on Stock Price Informativeness: International Evidence (September 2014). Accounting & Finance, Vol. 54, Issue 3, pp. 885-919, 2014, Available at SSRN: https://ssrn.com/abstract=2500554 or http://dx.doi.org/10.1111/acfi.12026

Jeong-Bon Kim

City University of Hong Kong ( email )

Department of Accountancy
83 Tat Chee Avenue
Kowloon Tong
Hong Kong
852-3442-7909 (Phone)

Li Jiang

Hong Kong Polytechnic University ( email )

Hung Hom, Kowloon
Hong Kong

Lei Pang

Hong Kong Baptist University (HKBU)

Department of Economics
Kowloon, Hong Kong
Hong Kong

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