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Based on a unique database that provides the institutional investors daily trade data on Chinas stock market, this study investigates the institutional investors information advantages by testing the trading strategies of institutional investors around earnings announcements in China.Our findings suggest the possibility that institutional investors trade on private information about earnings surprises.Moreover, a bad information environment restricts institutional investors ability to exploit PEAD strategies.Further evidence indicates that institutional investors trading activities accelerate the speed at which stock prices incorporate earnings information.This study can help the intemational investment community develop a better understanding of the role of institutional investors in Chinas equity market.