Institutional ownership and returns on investment
2016 (English)In: Corporate Ownership & Control, ISSN 1727-9232, E-ISSN 1810-3057, Vol. 13, no 4Cont3, 419-430 p.Article in journal (Refereed) Published
This paper examines how institutional investors influence investment decisions and returns on investment. To measure investment performance, we use marginal q, which measures the ratio of the return on investment to the cost of capital. Institutional owners are found to have a positive but marginally diminishing effect on performance. Our paper uses longitudinal data on Swedish firms from 1999 to 2005; during this period, the ownership structure of Swedish firms underwent dramatic changes as institutional investors increased their ownership shares, while ownership by Swedish households decreased. However, controlling owners - who were often founding families - maintained their control of firms by resorting to extensive use of dual-class shares. This was an important determinant of firm performance that eradicated the positive influence of institutional ownership.
Place, publisher, year, edition, pages
2016. Vol. 13, no 4Cont3, 419-430 p.
Corporate Governance, Institutions, Marginal Q, Ownership, Performance, Tobin’s Average Q
IdentifiersURN: urn:nbn:se:hj:diva-32126ScopusID: 2-s2.0-84988378434OAI: oai:DiVA.org:hj-32126DiVA: diva2:1040653