Abstract
ABSTRACT This study examines whether securities investment fund ownership correlates with longitudinal persistence for high and low earnings. Using longitudinal data analysis methods, including a Cox proportional hazards regression model and a hierarchical linear regression model, we obtain two main findings: (1) For a low level of earnings, fund ownership not only reduces the likelihood of earnings decline but also increases the likelihood of an upward trend in earnings; (2) For a high level of earnings, fund ownership reduces not only the likelihood of earnings decline but also the likelihood of a downward trend in earnings. Our study provides evidence that funds emphasize firms’ long-term earnings persistence when they choose stocks.
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