Dear all,

For my Master Thesis I am examining the change in institutional holdings after receiving a negative Going-Concern Opinion.

I follow a method from a paper published in 2009 where they use the mean-adjusted change in aggregate institutional holdings of firm j's shares outstanding by a certain group of institutions.
For the adjustment, they state: "The adjustment is made by subtracting the average change in aggregate holdings by each group of institutions (i.e., total, transient, dedicated, and quasi-indexing institutions, respectively) across all firms on the CDA/Spectrum database over the same calendar quarter q, in order to control for time trends in the change in holdings by each group of institutions"

I've read this sentence probably 200 times, but I do not seem to really understand the idea behind this. Is there someone who can explain the intuition behind a mean-adjusted change to me and how does it control for time trends? Of course, I could simply follow the steps in my dataset but I am not able to explain this concept in my own words, which would definitely be needed in a thesis defense.

Thank you so much in advance!

Kind regards,
Imke