Institutional Investor Distraction and Opportunistic Stock Selling Behaviors of Executives
This paper examines the impact of institutional investor distraction on opportunistic stock selling behaviors of executives,using extreme profit shocks in unrelated industries within their portfolios as shocks.The study finds that executives are more likely to engage in opportunistic stock selling when institutional investors weaken their oversight due to distraction.The mechanism at play reveals that institutional investor distraction exacerbates executive opportunistic stock selling by reducing stock price informativeness.Heterogeneous analysis reveals that a well-functioning corporate governance environment,state-owned enterprise status,selling cost,and executive incentives can exert supervisory effects and mitigate executive opportunistic stock selling in the context of institutional investor distraction.Further research reveals the prolonged effect of institutional investor distraction,with a higher level of institutional investor self-monitoring intensifying the impact of distraction on executive opportunistic stock sales,allowing executives to gain greater excess returns or avoid more wealth losses in opportunistic stock selling.This article not only enriches the economic consequences of institutional investor distraction,providing new insights for researching the governance effects of institutional investors but also offers important insights for regulatory authorities to strengthen the oversight of executive opportunistic divestments.
NETL
NSTL
万方数据
