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Does common institutional ownership matter for equity mispricing

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  • Sun, Qian
  • Ge, Linyun
  • Gao, Yitang
  • Zhang, Zixi

Abstract

By analyzing data from Chinese A-share non-financial public companies between 2008 and 2022, this paper examines how common institutional ownership impacts equity mispricing. Our findings show common institutional ownership alleviates equity mispricing. This inhibitory effect is particularly pronounced in companies belonging to non-monopolistic industries, operating in highly competitive industries, or occupying weaker market positions. Channel analysis demonstrates that common institutional ownership helps reduce equity mispricing by alleviating information asymmetry. Our study broadens the investigation into economic perspective of common institutional ownership, while enhancing the theoretical and empirical understanding of determinants underlying equity mispricing phenomena.

Suggested Citation

  • Sun, Qian & Ge, Linyun & Gao, Yitang & Zhang, Zixi, 2025. "Does common institutional ownership matter for equity mispricing," Finance Research Letters, Elsevier, vol. 86(PA).
    • Handle: RePEc:eee:finlet:v:86:y:2025:i:pa:s1544612325016484
    DOI: 10.1016/j.frl.2025.108394
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