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Stock Price Crash Risk and Institutional Ownership: Evidence from the Tehran Stock Exchange
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Tayyebeh Rajabi1   , Roya Darabi *2 , Fatemeh Asgari1 |
1- Department of Accounting, ST.C., Islamic Azad University, Tehran, Iran
2- Department of Accounting, ST.C., Islamic Azad University, Tehran, Iran , royadarabi@iau.ac.ir |
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Abstract: (9 Views) |
This study examines the relationship between institutional ownership and stock price crash risk among non-financial firms listed on the Tehran Stock Exchange over the period 2015–2024. Using a sample of 50 firms and 500 firm-year observations, and employing fixed-effects panel regression, the results show that broad institutional ownership (TIOR) has no significant effect on crash risk. In contrast, professional institutional ownership (PIFMIIOR) has a positive and significant effect on crash risk, and institutional exit further intensifies this risk. These findings support the short-termism perspective and suggest that, in Iran’s capital market, professional institutional investors, particularly domestic ones, may increase crash risk through short-term trading behavior and stronger selling pressure rather than through monitoring. The results are consistent with evidence from other emerging markets, including Turkey, Vietnam, China, and Pakistan, and highlight the need for regulatory policies tailored to ownership structure and market liquidity. The interaction analysis also indicates that high liquidity combined with institutional ownership above the 6.14% threshold exacerbates crash risk.
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Article number: 8 |
| Keywords: institutional ownership, foreign institutional ownership, stock price crash risk, monitoring role, short-termism, exit. |
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Full-Text [PDF 516 kb]
(5 Downloads)
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Article type: Research |
Subject:
General
Received: 2026/05/4 | Accepted: 2026/08/4 | Published: 2026/11/11
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