This paper uses a new data set of quarterly portfolio holdings of 769 all-equity pension funds between 1985 and 1989 to evaluate the potential effect of their trading on stock prices. We address two aspects of trading by money managers: herding, which refers to buying (selling) the same stocks...

Investigates the relationship between management ownership and market valuation of the firm, as measured by Tobin's Q. The convergence-of-interest hypothesis suggests that a firm's market valuation should rise as its management owns an increasingly large portion of the firm. On the other hand,...