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

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  • Fateh Saci

    (UPR CHROME – University of Nîmes – University of Mayotte)

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.

Suggested Citation

  • Fateh Saci, 2025. "Does the research done by the institutional investors affect the stock price synchronicity?," Journal of Asset Management, Palgrave Macmillan, vol. 26(6), pages 579-595, October.
    • Handle: RePEc:pal:assmgt:v:26:y:2025:i:6:d:10.1057_s41260-025-00423-1
    DOI: 10.1057/s41260-025-00423-1
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    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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