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Institutional Investors, Board of Directors, and Firm Performance -- Evidence from UK Firms
| Content Provider | Semantic Scholar |
|---|---|
| Author | Dong, Min |
| Copyright Year | 2007 |
| Abstract | This paper examines the links between institutional ownership and firm performance. Specific attention is paid to the role of institutional investors in influencing the relationship between the board of directors and firm performance. First of all, our analysis shows institutional ownership is associated with better firm performance, and the difference is more significant when no other large (>5%) shareholding is present. We also find the presence of institutional ownership strengthens the link between executive ownership and performance more significantly when no other large external shareholders is present or when there is an individual institutional ownership higher than executive ownership. Our finding is consistent with institutional monitoring hypothesis and suggests complementarity between institutional investors and executive directors; it also indicates institutional monitoring might be subject to free-rider problem and executive pressure. Finally, with regards to non-executive directors, we detect no evidence suggesting institutional investors make non-executive director work more effectively. |
| File Format | PDF HTM / HTML |
| Alternate Webpage(s) | https://www.efmaefm.org/0EFMAMEETINGS/EFMA%20ANNUAL%20MEETINGS/2007-Austria/papers/0314.pdf |
| Language | English |
| Access Restriction | Open |
| Content Type | Text |
| Resource Type | Article |
