Common institutional ownership and stock price informativeness in carbon-intensive industries

This paper examines whether common institutional ownership (CIO) affects stock price informativeness in firms exposed to high environmental risk. Using a panel of French listed companies from 2005 to 2021, we study the extent to which firm-specific information is reflected in equity prices, proxied by stock price synchronicity. We find that higher CIO is associated with greater synchronicity, and that this effect is significantly stronger in carbon-intensive industries. This moderating pattern suggests that ESG disclosure regimes, where reporting is highly standardized and climate-related information is especially salient, amplify CIO-induced alignment in firms’ disclosure environments. Our results extend existing evidence on CIO’s strategic and disclosure coordination by showing that these dynamics have measurable capital-market consequences under environmental-risk conditions that constrain narrative discretion. We also document that reduced product-market competition serves as a secondary channel. Overall, the study highlights how environmental risk shapes the informational effects of ownership structures in capital markets.