Relationship between Institutional Ownership, Concentrated Institutional Ownership and Value-Relevance of Accounting Information

Abstract

This study aims to investigate the relationship between institutional ownership along with concentrated institutional ownership and value-relevance of accounting information in Tehran stock exchange. The authors used Ohlsen model for the relationship between earnings per share and market value as the income statement index, and the relationship between book value of equity per share and market value as the balance sheet index based. Regression analysis is used to test the relationship among the variables, regarding firms’ specific factors. Results showed that institutional ownership and concentrated institutional ownership are correlated significantly with value-relevance of accounting information, but the signs of relationships are different. The increase in institutional ownership decreases value-relevance of balance sheet information, but it increases value-relevance of income statement information. Furthermore, the raise of concentration of institutional ownership reduces quality of income statement information, and then, value relevance of this information, but it increases value-relevance of balance sheet information.

Keywords

• keywords: institutional owners
• concentrated institutional owner-ship
• value-relevance of earnings
• value-relevance of book value