Using geographically proximate institutions as a close approximation to informed investors, this paper examines the informational role of institutional investors in stock markets. We find that both the level of and change in local institutional ownership predict future stock returns; in...

Using foreign institutional ownership data in the U.S. from 1990 to 2007, we examine whether foreign institutional investors face liabilities of foreignness (LOF) in the U.S. stock market. We find that foreign institutional investors prefer low information asymmetry stocks more than domestic...