Nicha Lapanan

• Anchev, Stefan & Lapanan, Nicha (2026). The Number of Institutional Investors in the Stock Market and the Relevance of Firms' Earnings: A Time-Series Analysis. European Accounting Review. ISSN 0963-8180. doi: 10.1080/09638180.2026.2642012. Full text in Research Archive Show summary

  We find empirical evidence that the temporal increase in the number of institutional investors in the stock market is related to the decrease in the relevance of firms' earnings over time. This relation is: (1) apparent primarily in the short term, (2) unidirectionally Granger-causal, (3) time-invariant, (4) driven by transient and quasi-indexing institutions, and (5) obtained after controlling for time trends, several potential risk factors, and various stock market and economy characteristics. Overall, these results are consistent with the hypothesis that, due to an improvement in the risk sharing among institutional investors, the increase in their quantity in the stock market has weakened their incentives to use earnings information.

• Anchev, Stefan & Lapanan, Nicha (2023). Investor Base Size and Underreaction-Consistent Stock Return Anomalies. European Accounting Review. ISSN 0963-8180. doi: 10.1080/09638180.2023.2265975. Full text in Research Archive Show summary

  We find that several well-documented underreaction-consistent stock return anomalies, such as those based on stocks' earnings-to-price ratios, returns on assets and past returns, arise and persist only among stocks with smaller (institutional) investor bases, which are presumably stocks that are neglected by investors. These results are driven by the short side of our long-short trading strategies (i.e., by the seemingly overpriced stocks from the bottom quantiles of the anomaly variables), they appear even after controlling for several stock characteristics (e.g., market capitalization and institutional ownership) and potential risk factors, and they are considerably more pronounced during periods with more information and/or less technology. Overall, these findings suggest that the incomplete dissemination of (negative) information across investors helps in explaining the occurrence and the persistence of the anomalies.

• Hellström, Jörgen; Lapanan, Nicha & Olsson, Rickard (2020). Socially Responsible Investments Among Parents and Adult Children. European Economic Review. ISSN 0014-2921. 121, p. 103–328. doi: 10.1016/j.euroecorev.2019.103328. Full text in Research Archive Show summary

  Novel evidence is provided of a positive correlation between parents’ and their children's socially responsible mutual fund investment behavior. Although captured parent-child correlations reflect contemporary relationships, they reveal potentially important insight into the origin of heterogeneity in individuals’ prosocial behavior. Consistent with research on socialization, the results suggest an influence from both parents, stronger for mothers, and reinforced for parents both investing in socially responsible mutual funds. Parental resources during an individual's adolescence (financial and parental life experience) are further found to significantly explain individuals’ adult prosocial investment behavior. The results are robust to conditioning on a number of alternative explanations.

• Lapanan, Nicha (2018). The Investment Behavior of Socially Responsible Individual Investors. Quarterly Review of Economics and Finance. ISSN 1062-9769. 70, p. 214–226. doi: 10.1016/j.qref.2018.05.014. Full text in Research Archive Show summary

  Using data on individual investors’ equity mutual fund portfolios from 2003 to 2007, this paper describes the behavior of investors in relation to socially responsible (SR) funds. The results suggest that most SR investors rebalance their portfolios slightly more often than conventional investors do, hold potentially more diversified portfolios, and hold a mixed portfolio combining both conventional and SR funds. Further, while SR investors’ buying decisions are similarly sensitive to the past returns on SR and conventional funds, SR investors’ selling decisions are more sensitive to the past negative returns on SR than on conventional funds, which indicates that they are less likely to sell SR than conventional funds as past negative returns decrease. Moreover, the aggregated flows of SR and conventional funds are similarly sensitive to past returns. However, the aggregated flows of SR funds for which the majority of their investors are sticky SR investors are less sensitive to past positive returns. Finally, sticky SR investors’ flows (at the individual level) are more sensitive to the past positive returns and are less sensitive to the past negative returns on SR than on conventional funds. Although these results suggest that sticky SR investors do have values-driven motives for holding SR funds, their flows to SR funds are less persistent than their flows to conventional funds, which indicates that these investors are less likely to reinvest in SR than in conventional funds.

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