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Value relevance of institutional investors

George Karathanassis (Department of Business Administration, Athens University of Economics and Business, 76 Patission Street, 104 34 Athens, Greece)
Nikolaos Philippas (Department of Financial and Banking Management, University of Piraeus)
Efthymios G. Tsionas (Department of Economics, Athens University of Economics and Business)
Demosthenes Hevas (Department of Business Administration, Athens University of Economics and Business)

Managerial Finance

ISSN: 0307-4358

Article publication date: 1 October 2004



In this paper we investigate the influence of institutional investors on share prices using data from companies quoted on the Athens Stock Exchange. For finance theorists the value of an investment, real or financial, is a function of its expected benefits and the riskiness of these benefits. Whatever influences are exerted by the structure of equity ownership are diversified away by efficient risk‐averse investors. Managerial and agency theorists argue that the particular ownership structure may have an effect on share value or returns. Their arguments are based (mainly) on the consequences of the separation of ownership from control. In addition to traditional methods of estimation we have used Chamberlain’s (1982) multivariate panel data estimator, which allows for arbitrary patterns of error autocorrelation and parameter temporal behavior. Among all alternative methods of estimation used, only this one produced a statistically significant and econometrically well specified relationship between share prices and institutional shareholdings.



Karathanassis, G., Philippas, N., Tsionas, E.G. and Hevas, D. (2004), "Value relevance of institutional investors", Managerial Finance, Vol. 30 No. 10, pp. 45-62.



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Copyright © 2004, Emerald Group Publishing Limited

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