Do institutional investors destabilize stock prices? evidence from an emerging market

Martin T. Bohl, Janusz Brzeszczyński

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    41 Citations (Scopus)


    In this paper, we provide empirical evidence on the impact of institutional investors on stock market returns dynamics in Poland. The Polish pension system reform in 1999 and the associated increase in institutional ownership due to the investment activities of pension funds are used as a unique institutional characteristic. We find robust empirical evidence that the increase of institutional ownership has changed the autocorrelation and volatility structure of aggregate stock returns. However, the findings do not support the hypothesis that institutional investors have destabilized stock prices. The results are interpretable in favor of a stabilizing effect on index stock returns induced by institutional trading. © 2005 Elsevier B.V. All rights reserved.

    Original languageEnglish
    Pages (from-to)370-383
    Number of pages14
    JournalJournal of International Financial Markets, Institutions and Money
    Issue number4
    Publication statusPublished - Oct 2006


    • Institutional traders
    • Polish pension fund investors
    • Stockmarket volatility


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