Shareholder Coordination, Information Diffusion and Stock Returns

33 Pages Posted: 10 Oct 2017

See all articles by Christos Pantzalis

Christos Pantzalis

University of South Florida

Bin Wang

Marquette University - College of Business Administration

Date Written: November 2017

Abstract

We show that the quality of information‐sharing networks linking firms’ institutional investors has stock return predictability implications. We find that firms with high shareholder coordination experience less local comovement and less post‐earnings announcement drift, consistent with the notion that information‐sharing networks facilitate information diffusion and improve stock price efficiency. In support of the view that coordination acts as an information diffusion channel, we document that the stock return performance of firms with high shareholder coordination leads that of firms with low shareholder coordination.

Keywords: shareholder coordination, information diffusion, return predictability

JEL Classification: G14, G20, G30

Suggested Citation

Pantzalis, Christos and Wang, Bin, Shareholder Coordination, Information Diffusion and Stock Returns (November 2017). Financial Review, Vol. 52, Issue 4, pp. 563-595, 2017. Available at SSRN: https://ssrn.com/abstract=3050211 or http://dx.doi.org/10.1111/fire.12124

Christos Pantzalis (Contact Author)

University of South Florida ( email )

Tampa, FL 33620-5500
United States
(813) 974-3262 (Phone)

Bin Wang

Marquette University - College of Business Administration ( email )

P.O. Box 1881
Milwaukee, WI 53201-1881
United States

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