For years institutional investors have concentrated their holdings of common stock in a relatively small group, the “institutional favorites.” While the market performance and changes in the composition of institutional favorites were reported in financial literature from the 1950s, no...

This paper examines the effect of institutional investors on the trading volume reaction to management forecasts of annual earnings. Based on a sample of forecasting firms between 1990 and 1992, institutional investors are examined as heterogeneous types, rather than as a single group as done in...