This paper reevaluates the cross-sectional effect of institutional ownership on idiosyncratic volatility by conditioning on institutions' investment horizon. Prior literature establishes a positive link between growing institutional ownership and idiosyncratic volatility. However, this effect...

We examine the relation between institutions' investment horizons on firms' financing and investment decisions. Firms with larger short-term institutional ownership use less debt financing and invest more in corporate liquidity. In contrast, firms with larger long-term institutional ownership...