The relation between institutional investors (Dedicated and Transient) and stock price synchronicity in Iran stock market

Abstract. This paper reviews the relation between institutional investors (dedicated and transient) and synchronicity of stock prices. In this research the relation kind of dedicated and transient institutional stockholders with the price synchronicity (a scale to measure the relative amount of the company’s specific information reflected in the price) have been examined considering the monitoring incentives and also the investment horizon of these investors. The hypotheses relating this research have been examined through simple and multiple linear regressions, panel data, and via Eviews software. The findings of this study indicates that the monitoring of dedicated institutional investors leads to reduce the access of managers to the cash flow of the company and also decreases the risk taken by managers which conclude to a decline in R2 and therefore the simultaneity of stock prices shrinks.

Keywords:

Dedicated institutional investors Transient institutional investors, synchronicity of stock prices,

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