scholarly journals Impact of Institutional Investment Pattern on Stock Volatility: A Study of BSE-30 Companies

2016 ◽  
Vol 3 (1) ◽  
Author(s):  
Harendra Singh
Keyword(s):  
Institutional Investors ◽  
Institutional Ownership ◽  
Stock Volatility ◽  
Institutional Investment ◽  
Investment Pattern ◽  
Institutional Holdings ◽  
The Mind ◽  
The Impact

<p>There are many studies found in the field of stock volatility and institutional investors. Most of the studies found an inconsistent relationship between volatility and institutional investors. It creates a curiosity in the mind of investor, whether riskier securities attract institutional investors or an increase in institutional holdings results in an increase in volatility.</p><p><br />In this paper we tried to examine the impact of institutional ownership pattern on stock volatility. We have considered BSE-30 companies and taken 5 year data from 1st January 2009 to 1st January 2014. Our result shows that institutional ownership has positive and significant impact on stock volatility.</p>

scholarly journals Board structure and institutional ownership at the time of IPO

2017 ◽  
Vol 43 (9) ◽  
pp. 950-965 ◽  
Author(s):  
Suman Neupane ◽  
Biwesh Neupane
Keyword(s):  
Institutional Investors ◽  
Critical Time ◽  
Institutional Ownership ◽  
Board Independence ◽  
Board Structure ◽  
Data Set ◽  
Content Type ◽  
Institutional Holdings ◽  
Foreign Institutional Investors ◽  
The Impact

Purpose The purpose of this paper is to examine the impact of mandatory regulatory provisions on board structure and the influence of such board structure on institutional holdings. Design/methodology/approach The study uses unique hand-collected data set of Indian IPOs during the 2004-2012 period after the corporate governance reforms with the introduction of clause 49 in the listing agreements in 2001. Using OLS regression, the paper empirically analyses the determinants of board size and board independence at the time of the IPOs and the influence of such a board structure on shareholdings by domestic and foreign institutional investors. Findings The authors find that complying with mandatory regulatory provisions does not impede firms from structuring their boards to reflect the firms’ advising and monitoring needs. The authors also find that complying with provisions have positive implication for the firm, as firms with greater board independence appear to attract more foreign institutional investors. Originality/value To the authors’ best knowledge, this is the first study to examine the issue in a regime where regulation mandates the composition of the board of directors. The paper also extends the literature on institutional holdings by providing evidence on the impact of board structure on institutional ownership at a critical time in a firm’s life cycle when concerns for endogeneity for empirical investigations are weaker.

Board financial expertise and foreign institutional investment: the moderating role of ownership concentration

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Shoukat Ali ◽  
Ramiz Ur Rehman ◽  
Bushra Sarwar ◽  
Ayesha Shoukat ◽  
Muhammad Farooq
Keyword(s):  
Institutional Investors ◽  
Boards Of Directors ◽  
Random Effect ◽  
Ownership Concentration ◽  
Institutional Investment ◽  
Content Type ◽  
Financial Expertise ◽  
Foreign Institutional Investors ◽  
The Impact ◽  
The Relationship

Purpose The purpose of this paper is to empirically investigate the impact of board financial expertise on the shareholding of foreign institutional investors in an emerging equity market of China and to explore whether ownership concentration moderates the relationship between board financial expertise and foreign institutional investment. Design/methodology/approach To test the hypothesized relationships, this study uses panel data regression models, i.e. static (fixed effect and random effect) and dynamic (two-step generalized methods of moments) models. Further, to control the possible endogeniety issue, this study uses two instrumental variables, namely, board size and industry average financial expertise of board to proxy board financial expertise. This study covers a period from 2006 to 2015 for 169 listed Chinese firms. Findings The results revealed that foreign institutional investors positively perceived board financial expertise and holds more shareholdings with the increasing level of financial experts at boards of directors. Moreover, ownership concentration positively moderated this relationship. It means that in highly concentrated firms, the board financial expertise conveys a stronger signal to foreign institutional investors that firms can manage financial resources rationally by controlling negative effects of ownership concentration. Further, the robustness model also confirmed the relationship between board financial expertise and foreign institutional shareholdings. Originality/value To the best of authors’ knowledge, this is the first study to investigate board-level financial expertise as a determinant of foreign institutional ownership. Further, no previous study has used ownership concentration as a contextual variable on the relationship between board financial expertise and foreign institutional investment.

Foreign Institutional Investors and Corporate Voluntary Disclosure Around the World

2019 ◽  
Vol 94 (5) ◽  
pp. 319-348 ◽  
Author(s):  
Albert Tsang ◽  
Fei Xie ◽  
Xiangang Xin
Keyword(s):  
Institutional Investors ◽  
Voluntary Disclosure ◽  
Home Country ◽  
Investor Protection ◽  
Institutional Ownership ◽  
Management Forecasts ◽  
Disclosure Requirements ◽  
The World ◽  
Foreign Institutional Investors ◽  
The Impact

ABSTRACT We examine the impact of foreign institutional investors on firms' voluntary disclosure practices measured by management forecasts. In a sample of 32 non-U.S. countries, we find that, on average, foreign institutional investments lead to improved voluntary disclosure, and their impact is larger than that of domestic institutional investors. These results are more pronounced when foreign institutional investors (1) are unfamiliar with the firm's home country, (2) have longer investment horizons, and (3) are from countries with stronger investor protection and disclosure requirements than the firm's home country. However, we also find some evidence of voluntary disclosure deterioration in firms with foreign institutional investors from countries with inferior disclosure requirements and securities regulations and with concentrated foreign institutional ownership. Overall, our results suggest that the relation between foreign institutional investors and voluntary disclosure is much richer and more complex than what has been documented for domestic institutional investors in the literature.

Subsidiary ownership decisions by bank holding companies

2019 ◽  
Vol 12 (3) ◽  
pp. 425-444
Author(s):  
Wenling Lu ◽  
Wan-Jiun Paul Chiou
Keyword(s):  
Institutional Investors ◽  
Fixed Effects ◽  
Institutional Ownership ◽  
Bank Holding Companies ◽  
Best Interest ◽  
Content Type ◽  
Holding Companies ◽  
Short Period ◽  
The Usa ◽  
The Impact

Purpose This study aims to examine the intertemporal changes in the institutional ownership of publicly traded bank holding companies (BHCs) in the USA. The role of owned-subsidiary investing in the portfolio decisions is investigated as compared to unaffiliated banks and non-bank institutional investors. Design/methodology/approach The authors apply panel regressions that control bank-fixed and time-fixed effects to study the impact of prudence, liquidity, information advantages and historical returns on each type of the institutional ownership from 1986 to 2014. Findings The subsidiary banks tend to invest in more shares of their parent BHCs when they are traded for a short period of time and when they have low-market risk, low turnover, a low capital equity ratio and great reliance on off-balance activities. However, the impact of these determinants of institutional ownership is opposite for unaffiliated banks and non-bank institutions. Research limitations/implications This study provides evidence that the criteria used by subsidiary banks to invest in their parent company stock are different than the unaffiliated banks and non-bank institutions, raising concerns about the owned-subsidiary investing activities and banks’ trustees’ duty to work in the best interest of their trust clients. Originality/value This paper provides a comprehensive analysis of the level and market value of BHC institutional ownership over the past three decades and the impact of different determinants on the ownership of BHCs by subsidiary banks, unaffiliated banks and non-bank institutional investors.

scholarly journals An Empirical Study of Institutional Investor and Enterprise Innovation

2018 ◽  
Vol 14 (1) ◽  
pp. 227
Author(s):  
Cheng Min
Keyword(s):  
Technological Innovation ◽  
Institutional Investors ◽  
Positive Impact ◽  
Empirical Test ◽  
Institutional Investment ◽  
National Competitiveness ◽  
Social And Economic Development ◽  
Enterprise Innovation ◽  
The Impact

Innovation is the driving force of social and economic development, and a decisive factor in enhancing national competitiveness. In recent years, more and more countries have taken innovation to a strategic height. Chinese institutional investors have an increasing share of the overall ownership and make a remarkable improvement in the market position. Based on an increasingly significant role in the capital market, they actively intervene in the management of the enterprise, focusing on long-term improvement of corporate performance. Correspondingly, Institutional investors can also affect the level of technological innovation by participating in corporate governance. This study analyzes the mechanism of institutional investment affecting the technological innovation of enterprises, and takes an empirical test of institutional investors on the impact of technological innovation. The results show that the overall ownership of institutional investors has a significant positive impact on corporate R&D expenditure. This paper proposes that the future policies should still be oriented toward the development and support of institutional investors, and give further play to their efforts to promote technological innovation of enterprises.

scholarly journals Dividend Payouts, Firm Characteristics Under Agency Factors’ Mediation in Pakistan

2019 ◽  
Vol 1 (2) ◽  
pp. 57-63
Author(s):  
Tayyaba Ashraf ◽  
◽  
Javed Iqbal ◽  
Shehzad Akhtar
Keyword(s):  
Ownership Structure ◽  
Stock Return ◽  
Institutional Ownership ◽  
Free Cash Flow ◽  
Firm Characteristics ◽  
Stock Volatility ◽  
Listed Firms ◽  
Enterprise Value ◽  
Mediating Role ◽  
The Impact

Under the bilateral approach of the impact of dividend pay-outs with the mediating role of Agency variables, this paper tries to examine its effects on enterprise value, earning per share, stock performance (including Stock Return & Volatility). The mediation test performed by inspecting direct and indirect relationships of dividend pay-out, firm characteristics, and agency factors on a sample size of 130 Pakistani listed firms over eleven years. Results of a study expose the agency factors (such as free cashflows and total institutional ownership structure) role; free cash flow does not mediate the relationship of dividend pay-outs with earning per share and stock volatility separately. Total institutional ownership structure mediates dividend pay-out relation with enterprise value and stock return & volatility. These mixed results contribute to the current literature of finance, specifically in the Pakistani context being an emerging economy.

scholarly journals Institutional Ownership Composition and Earnings Management

2012 ◽  
Vol 15 (04) ◽  
pp. 1250022 ◽  
Author(s):  
Ling Lin ◽  
Pavinee Manowan
Keyword(s):  
Earnings Management ◽  
Institutional Investors ◽  
Institutional Ownership ◽  
High Turnover ◽  
Management Scenario ◽  
Accounting Accruals ◽  
Block Holders ◽  
Ownership Composition ◽  
The Impact ◽  
The Relationship

This paper examines the impact of outside block-holders on earnings management, using discretionary accounting accruals as the measure of earnings management. For the income-decreasing earnings management scenario, we do not find significant results. This may be attributable to the different natures and time horizons of outside block-holders. Since the majority of outside block-holders are institutional investors, we then investigate the relationship between ownership by institutional investors with different natures and earnings management. Specifically, we find a significant positive relationship between ownership by transient institutional investors (holding diversified portfolios with high turnover) and discretionary accounting accruals. However, we do not find a significant relationship between ownership by dedicated institutional investors (holding concentrated portfolios with low turnover) and discretionary accounting accruals. Therefore, due to the differing natures of institutional investors, we may not treat them as a homogeneous group.

scholarly journals UK REIT conversion and institutional ownership dynamic

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Woei Chyuan Wong
Keyword(s):  
Event Study ◽  
Institutional Investors ◽  
Systematic Risk ◽  
Institutional Ownership ◽  
Policy Implications ◽  
Firm Age ◽  
Content Type ◽  
Conversion Event ◽  
Property Companies ◽  
The Impact

PurposeThe purpose of this paper is to examine the impact of conversion to REIT status by former listed property companies in the United Kingdom on the level of institutional ownership during the period of 2007–2016.Design/methodology/approachThis paper uses an event study framework to track the change in institutional ownership three years before and after a REIT conversion event. This event study approach circumvents the sample selection bias issue associated with the conversion event wherein the decision to convert to REIT is likely to be endogenous.FindingsPanel regression analysis reveals that changing to REIT status led to a 12.8 and 15.2% increase in institutional ownership and number of institutional investors, respectively. The first order of priority in institutional investors' investment in REIT shares is their preference for liquidity. Further analysis shows that institutional investors changed their preferences towards characteristics associated with systematic risk, firm age and liquidity after the conversion event by becoming less averse to firm-specific risk, placing more emphasis on firm age and less emphasis on systematic risk and liquidity.Practical implicationsOverall, conversion to REIT status helps increase former property companies' investor base, which is in line with the regulator's aim to open up the property market to a wide range of investors through the introduction of a REIT regime. Findings from this paper also have policy implications for countries that are considering a REIT regime for their capital market and existing REIT regimes without a formal conversion mechanism.Originality/valueThis paper offers, for the first time, evidence on 1) how conversion to REITs influences firms' institutional ownership and 2) the determinants of converted REITs' institutional ownership.

scholarly journals Insider Trading and Institutional Holdings in Seasoned Equity Offerings

2018 ◽  
Vol 11 (3) ◽  
pp. 53 ◽  
Author(s):  
Ching-Chih Wu ◽  
Tung-Hsiao Yang
Keyword(s):  
Insider Trading ◽  
Institutional Investors ◽  
Explanatory Power ◽  
Spillover Effects ◽  
Seasoned Equity Offerings ◽  
Trading Behavior ◽  
Equity Offerings ◽  
Institutional Holdings ◽  
Insider Trades ◽  
The Impact

We investigate three issues about the impact of insider trades and institutional holdings on seasoned equity offerings (SEOs). First, we test how insider trades affect the trading behavior of institutional investors in SEOs. Second, we test whose trading behavior, either insiders or institutional investors, has greater explanatory power for the performance of SEO firms after issuing new stocks. Third, we analyze the industry-wide spillover effects of insider trades and institutional holdings. Empirically, we find that insiders and institutional investors of SEO firms may utilize similar information in their transactions because insider trades induce similar trading behavior for institutional investors. In addition, insider trades, relative to institutional holdings, have greater explanatory power for SEO firm’s long-term performance. Finally, compared with insider trades, institutional holdings have a more significant spillover effect in the industry of SEO firms.

scholarly journals Dividend Policy and Institutional Holdings: Evidence from Australia

2020 ◽  
Vol 8 (1) ◽  
pp. 12
Author(s):  
Thao Nguyen ◽  
Hui Li
Keyword(s):  
Panel Data ◽  
Institutional Investors ◽  
Institutional Ownership ◽  
Dividend Yield ◽  
Dividend Payout ◽  
Multivariate Tests ◽  
Listed Firms ◽  
Insignificant Effect ◽  
Institutional Holdings ◽  
The Relationship

This paper investigates the relationship between dividend payout and institutional ownership for all Australian listed firms in the period between 2001 and 2015. In our univariate tests, we find that institutional investors, in general, prefer dividend-paying firms more than non-paying firms, and for the dividend-paying firms in our sample, institutional investors hold more shares in the firms who pay higher dividends. We further explore the causality between dividend payout and institutional ownership in our multivariate tests with our panel data. The results show an insignificant effect of institutional ownership (dividend payout) on the future dividend payout (institutional ownership) while controlling for firms’ fundamentals, that a higher dividend yield does not attract more institutional investors and that there is no catering to Australian institutional investors.

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