FURTHER EVIDENCE ON INSTITUTIONAL OWNERSHIP AND CORPORATE VALUE
ISBN: 978-0-7623-1187-3, eISBN: 978-1-84950-333-4
Publication date: 1 June 2005
Abstract
Whether institutional investors monitor corporations and improve firm value is a key question for corporate governance and investment management. I find little empirical support for the hypothesis that institutions undertake monitoring that increases firm quality and valuation. Granger causation tests show that while quality firms do attract institutional investment, institutions do not monitor and firm value subsequently declines. Instead, institutional incentives are critical; some institutions with strong incentives to monitor do, indeed, monitor. Institutions with concentrated portfolios successfully monitor while institutions with a larger percentage stake do not. Pensions and endowments are better monitors than insurers, banks and mutual funds.
Citation
Jennings, W.W. (2005), "FURTHER EVIDENCE ON INSTITUTIONAL OWNERSHIP AND CORPORATE VALUE", Hirschey, M., John, K. and Makhija, A.K. (Ed.) Corporate Governance (Advances in Financial Economics, Vol. 11), Emerald Group Publishing Limited, Leeds, pp. 167-207. https://doi.org/10.1016/S1569-3732(04)11008-6
Publisher
:Emerald Group Publishing Limited
Copyright © 2005, Emerald Group Publishing Limited