On institutional ownership and firm performance : a disaggregated view

Bhattacharya, Prasad and Graham, Michael 2009, On institutional ownership and firm performance : a disaggregated view, Journal of multinational financial managment, vol. 19, no. 5, pp. 370-394, doi: 10.1016/j.mulfin.2009.07.004.

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Title On institutional ownership and firm performance : a disaggregated view
Author(s) Bhattacharya, PrasadORCID iD for Bhattacharya, Prasad orcid.org/0000-0003-2818-0835
Graham, Michael
Journal name Journal of multinational financial managment
Volume number 19
Issue number 5
Start page 370
End page 394
Total pages 25
Publisher Elsevier B. V.
Place of publication Amsterdam, The Netherlands
Publication date 2009-12
ISSN 1042-444X
Keyword(s) institutional ownership
firm performance
system of equations
two-way feedback
Summary We study the relationship between institutional ownership and firm performance in Finland. A systems approach is employed to investigate the potential two-way causality between firm performance and ownership structure. Three-stage least squares estimation technique is used to solve for the systems. The evidence suggests an endogeneity problem between firm performance and institutional ownership. However, the magnitude of the problem differs with respect to the concentration of ownership measure used. Our results show that a more equal distribution of the voting power among the largest institutional stakeholder may exert positive effects on firm performance. We also find a significant difference relating to firm performances and equity ownerships between the two classes of institutional investor. Consistent with the ownership structure in Finland, we find that a simple ownership concentration index does not influence firm performance.
Language eng
DOI 10.1016/j.mulfin.2009.07.004
Field of Research 140207 Financial Economics
140301 Cross-Sectional Analysis
140399 Econometrics not elsewhere classified
Socio Economic Objective 970114 Expanding Knowledge in Economics
HERDC Research category C1 Refereed article in a scholarly journal
Copyright notice ©2009, Elsevier B.V.
Persistent URL http://hdl.handle.net/10536/DRO/DU:30022720

Document type: Journal Article
Collections: Faculty of Business and Law
School of Accounting, Economics and Finance
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