How do institutional investors trade when firms are buying back shares?

Recent work suggests that institutional investors execute profitable trades based on private information about earnings and returns. We provide new ev-idence on the prevalence and sources of such informed trading by (1) testing for the creation and liquidation of positions based on private

decisions and therefore behave like momentum traders. However, thus far, no study has yet conducted a comprehensive analysis on whether institutional investors indeed behave differently when trading foreign and domestic stocks and on the differences in their trade motivations at home and abroad. To examine

at Sun Yat-sen University and University of International Business and Economics for their helpful comments and suggestions. Tan is grateful for the funding of this research by Hong Kong Baptist University. The authors alone are responsible for all limitations and errors that may relate to the study and the paper. 2

I test the disposition effect, the tendency of investors to hold losing investments too long and sell winning investments too soon, by analyzing trading records for 10,000 accounts at a large discount brokerage house. These investors demonstrate a strong preference for realizing winners rather than

Recent research on corporate governance has documented large differences between countries in ownership concentration in publicly traded firms, in the breadth and depth of financial markets, and in the access of firms to external finance. We suggest that there is a common element

Individual investors who hold common stocks directly pay a tremendous performance penalty for active trading. Of 66,465 households with accounts at a large discount broker during 1991 to 1996, those that trade most earn an annual return of 11.4 percent, while the market returns 17.9 percent

Using a novel, and detailed custody trades dataset, this paper analyzes the trading behavior of institutions. Extant studies have examined the effects of past performance on trading by retail investors, day traders, and futures floor traders. Yet very little work has been done on institutions. We

We estimate the respective contributions of institutions, geography, and trade in determining income levels around the world, using recently developed instrumental variables for institutions and trade. Our results indicate that the quality of institutions “trumps” everything else. Once institutions

Gravity equations have been widely used to infer trade ow effects of various institutional arrangements. We show that estimated gravity equations do not have a theoretical foundation. This implies both that estimation suffers from omitted variables bias and that comparative statics analysis