scholarly journals The Effects of Stewardship Code on the Exercise of Voting Rights by Institutional Investors at Shareholders’ Meetings

2020 ◽  
Vol 49 (4) ◽  
pp. 515-543
Author(s):  
Sun Min Kim ◽  
Kyung Suh Park ◽  
Chan Shik Jung
Keyword(s):  
Corporate Governance ◽  
Institutional Investors ◽  
Stock Exchange ◽  
Agency Problems ◽  
Voting Rights ◽  
Foreign Investors ◽  
Listed Firms ◽  
Foreign Institutional Investors ◽  
Empirical Analyses

Based on the sample firms listed on the Korea Stock Exchange, this study analyzes the characteristics of institutional investors who adopted the Korea stewardship code. The changes in their voting patterns at annual shareholders’ meetings and the characteristics of firms that led to such changes after the stewardship code was introduced in December 2016 are also analyzed. Empirical analyses reveal that the institutional investors who belong to a financial group, invest a larger amount of money in stocks, pay more dividends in cash, belong to foreign institutional investors, and showed a higher level of negative votes before code participation tend to participate more actively in the stewardship code. We also find that the institutional investors who have introduced the code tend to show a higher level of negative voting, especially when invested firms have more severe agency problems such that the invested companies pay less dividends in cash but hold relatively more cash, and have low shares of foreign investors as effective monitors of the firms. These results suggest that the introduction of the stewardship code tends to lead domestic institutional investors to more actively monitor the invested companies, which would eventually help improve the corporate governance of listed firms in Korea.

scholarly journals Institutional investors’ response to improved corporate governance: Evidence from the brazilian capital market

2018 ◽  
Vol 64 (4) ◽  
pp. 135
Author(s):  
Eduardo Schiehll ◽  
Melissa Gerhard ◽  
Clea Beatriz Macagnan
Keyword(s):  
Corporate Governance ◽  
Capital Market ◽  
Institutional Investors ◽  
Stock Exchange ◽  
Emerging Market ◽  
Agency Cost ◽  
Data Set ◽  
Listed Firms ◽  
Internal Governance Mechanisms ◽  
Governance Quality

<p>This study examines whether normative pressures from stock market regulators to improve the governance quality of Brazilian listed firms influence the participation and activism of institutional investors. More specifically, we investigate the association between institutional investor’s ownership and firm’s voluntary adhesion to the São Paulo Stock Exchange (B3) differentiated levels of corporate governance quality. Empirical testing is performed on a ten-year (2002–2011) panel data set from a sample of 439 firms listed on the B3. Our findings suggest that firms in differentiated corporate governance levels, that is, with better level of transparency and commitment to monitoring, are more attractive to institutional investors. We interpret this result as evidence supporting the shareholder activism movement, attributed by several scholars to institutional shareholders. Our study contributes to the governance literature on the firm’s response to normative pressures and the ability of internal governance mechanisms to signal lower agency cost to capital market. Our evidence also contributes to the ongoing discussion about the role and influence of institutional investors in the functioning of capital markets, and more specific in emerging market like Brazil.</p>

scholarly journals Does CSR Moderate the Relationship between Corporate Governance and Chinese Firm’s Financial Performance? Evidence from the Shanghai Stock Exchange (SSE) Firms

2019 ◽  
Vol 12 (1) ◽  
pp. 149 ◽  
Author(s):  
Rizwan Ali ◽  
Muhammad Safdar Sial ◽  
Talles Vianna Brugni ◽  
Jinsoo Hwang ◽  
Nguyen Vinh Khuong ◽  
...  
Keyword(s):  
Corporate Governance ◽  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Financial Performance ◽  
Institutional Investors ◽  
Stock Exchange ◽  
Strategic Decision ◽  
Foreign Institutional Investors ◽  
Corporate Social ◽  
The Relationship

We have performed a focalized investigation to explore how corporate social responsibility (CSR) moderates the relationship between corporate governance and firms’ financial performance. We applied a panel regression to examine this relationship from a sample of 3400 Shanghai Stock Exchange (SSE) listed firms, based on yearly observations from 2009 to 2018. Our results show that the presence of female directors on the board is associated with improved firms’ performance and that corporate social responsibility (CSR) moderates this relation, thus indicating that sharing strategic decision-making with female board members revealed a better relationship between CSR and firms’ financial performance. Our findings showed that foreign institutional investors positively influenced firms’ financial performance and that CSR moderates the relation between foreign institutional shareholders and the firm’s financial performance. Supported by corporate governance theories, such as resource dependence and stakeholder theory, our results help to better understand the nexus among corporate governance, firms’ performance and corporate social responsibility. These findings are advantageous to government departments in emerging countries in terms of encouraging marketing practitioners and participants to implement CSR practices and change the attitude associated with CSR implications. This study highlighted the problems of the foreign institutional investors’ scheme, which was the main contribution to the financial market reform of China after 2003. These findings offer significant implications to corporate affairs executives and managers, practitioners, academicians, state officials, and policy-makers, and might provide China with the opportunity to extend its market liberalization to the global markets. This research also contributes to the existing literature, which investigates how CSR moderates the relationship between corporate governance and firms’ financial performance in the Chinese market context.

scholarly journals Analyzing the Link Between Agency Problems, Governance and Control Attributes for Pakistan

e-Finanse ◽  
2017 ◽  
Vol 13 (3) ◽  
pp. 43-65 ◽  
Author(s):  
Ahmad Ghazali ◽  
Ahmad Raza Bilal
Keyword(s):  
Corporate Governance ◽  
Cash Flow ◽  
Agency Costs ◽  
Stock Exchange ◽  
Agency Problems ◽  
Agency Cost ◽  
Free Cash Flow ◽  
Listed Firms ◽  
Utilization Ratio ◽  
Sound Policy

AbstractThis research attempts to analyze the relationship between agency, control and corporate governance attributes for a sample of 267 firms listed on the Pakistan Stock Exchange (PSX) from 2005 to 2008. The results show that a) Pakistani listed firms are facing high agency costs problems in contrast to established markets. b) Factors are observed important to having strong effect on mitigating agency costs levels: corporate dividend policy, degree of board independence, and institutional ownership. c) Corporate governance factors reduce discretionary expenditure ratio, increase assets utilization ratio and free cash flow ratio. d) Control variables increases the asset utilization ratio and decreases the free cash flow and increases the managers’ performance (Tobin’s Q ratio). e) Ownership attributes regulate free cash flow and decrease the discretionary expenditure ratio. The outcomes of this research lead to the proposed use of recommended governance, control and ownership attributes to overcome agency problems and a sound policy for better corporate governance (better management of agency cost issues) for listed firms.

scholarly journals Are the shareholding and trading behaviors of diverse investors affected by the relaxation of day trading?

PLoS ONE ◽  
2021 ◽  
Vol 16 (4) ◽  
pp. e0250121
Author(s):  
Wan-Hsiu Cheng ◽  
Yensen Ni ◽  
Ting-Hsun Ho ◽  
Chia-Jung Chiang ◽  
Paoyu Huang ◽  
...  
Keyword(s):  
Institutional Investors ◽  
Trading Volume ◽  
Stock Exchange ◽  
Individual Investors ◽  
Investment Strategies ◽  
High Turnover ◽  
Listed Firms ◽  
Day Trading ◽  
Taiwan Stock Exchange ◽  
Foreign Institutional Investors

The day trading in Taiwanese stock market expands considerably at the beginning of 2016, which increases the transactions of stocks consequently and sparks our interest in exploring the issue of day trading. In this study, we use the data of Taiwan Stock Exchange listed firms to investigate whether the day trading volume over total trading volume (hereinafter referred to as the day trading ratio) and the turnover ratio enhanced by the increase of day trading volume would affect the shareholding and trading behaviors of diverse institutional and individual investors. Unquestionably, we bring out several impressive findings. First, foreign institutional investors would not prefer holding or trading the stocks with high day trading ratios, whereas individual investors would prefer holding these kinds of stocks. We infer that this finding might result from the fundamental and the speculative concerns of these various investors. Second, domestic institutional investors and security dealers would prefer trading the stocks with high turnover ratios, but foreign institutional investors still lack of interest in trading these stocks, implying that the investment strategies would be dissimilar among various institutional investors. Since foreign institutional investors are regarded as the successful institutional investors in Taiwan, we argue that our revealed results may help market participants trace the behaviors of diverse investors, especially the foreign institutional investors, after day trading relaxation in Taiwan.

How Moroccan institutional investors view dividend policy

2017 ◽  
Vol 43 (12) ◽  
pp. 1332-1347 ◽  
Author(s):  
H. Kent Baker ◽  
Imad Jabbouri
Keyword(s):  
Institutional Investors ◽  
Stock Prices ◽  
Dividend Policy ◽  
Stock Exchange ◽  
Mail Survey ◽  
High Response Rate ◽  
Content Type ◽  
Listed Firms ◽  
Dividend Policies ◽  
Dividend Payments

Purpose The purpose of this paper is to examine how Moroccan institutional investors view dividend policy. It discusses the importance these investors attach to the dividend policy of their investee firms, how much influence they exercise in shaping investee firms’ dividend policies, their reactions to changes in dividends, and their views on various explanations for paying dividends. Design/methodology/approach A mail survey provides a respondent and firm profile and responses to 28 questions involving various explanations for paying dividends and 30 questions on different dividend issues. Findings Institutional investors attach substantial importance to dividend policy and prefer high dividend payments. Although liquidity needs are a major driver, taxes play little role in shaping dividend preferences. Respondents agree with multiple explanations for paying dividends giving the strongest support to catering, bird-in-the-hand, life cycle, signaling, and agency theories. Research limitations/implications Despite a high response rate, the number of respondents limits partitioning the sample and testing for significant differences between different groups. Practical implications The lack of communication between Casablanca Stock Exchange (CSE) listed firms and institutional investors may depress stock prices and increase volatility. The results suggest agency problems and a weak governance environment at the CSE. Originality/value This study documents the importance that institutional investors place on dividend policy, their reactions to changes in their investees’ dividend policy, and the methods used to influence these firms. It extends previous research by reporting the level of support Moroccan institutional investors give to various explanations for paying dividends.

Hans Sicat and the Transformation at the Philippine Stock Exchange

2014 ◽  
Vol 18 (02) ◽  
pp. 429-454
Author(s):  
Manuel C. Dioquino
Keyword(s):  
Stock Exchange ◽  
Chief Executive ◽  
Business Community ◽  
Foreign Investors ◽  
Listed Firms ◽  
The Public ◽  
Investment Banker ◽  
The Board Of Directors ◽  
The Subject ◽  
Credibility Problem

The Philippine Stock Exchange, Inc. (PSE) was suffering a credibility problem in 2011. Just like the Philippine economy, the PSE was not performing well and the integrity of its leadership and decisions they made was being questioned by the public at large and the business community in particular. Hans Sicat, a retired investment banker, was invited to join the Board of Directors with a tacit agreement that he would be elected Chairman. Events thereafter led to Mr. Sicat's appointment as President and Chief Executive Officer of the bourse. Hans Sicat turns around the stock exchange successfully. How he makes it look seemingly simple is the subject of this case. Hans places all transformative efforts into two “bucket lists”. All of his efforts to increase the volume of trade in the exchange are classified under Liquidity, while all efforts to restore the integrity within the bourse and its listed firms, he refers to as Governance issues. The Philippine Stock Exchange, Inc. transformation does not go unnoticed by domestic and foreign investors, and other stakeholders as well. It breaks the 5,000 point barrier.

scholarly journals Corporate Social Responsibility (CSR) and Risk Taking: Evidence from Indonesia

2019 ◽  
Vol 8 (1) ◽  
pp. 152-162
Author(s):  
Rezki Ananda Mulia ◽  
Joni Joni
Keyword(s):  
Corporate Governance ◽  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Risk Taking ◽  
Stock Exchange ◽  
Listed Firms ◽  
Market Risks ◽  
Corporate Social

In this paper, we investigate the effect of Corporate Social Responsibility (CSR) on risk taking in Indonesia. We hand collect CSR and other corporate governance data from 2016-2017 for publicly listed firms on the Indonesian Stock Exchange (IDX). The results, based on 820 firm-year observations, suggest that CSR activity is negatively related to corporate’s risk. This means the presence of CSR activity is positively perceived by stakeholders. Therefore, it reduces operating and market risks of the company. Also, we test for endogeneity and the main findings remain similar.

scholarly journals Corporate governance and capital structure in the periods of financial distress. Evidence from Greece

2017 ◽  
Vol 14 (1) ◽  
pp. 254-262 ◽  
Author(s):  
George Kyriazopoulos
Keyword(s):  
Corporate Governance ◽  
Capital Structure ◽  
Financial Distress ◽  
Sovereign Debt ◽  
Negative Impact ◽  
Stock Exchange ◽  
Debt Crisis ◽  
Outside Directors ◽  
Listed Firms ◽  
Athens Stock Exchange

This study examines the relationship between corporate governance and capital structure employing data from the Athens Stock Exchange for the period 2005-2014. This period encompasses the sovereign debt crisis erupted in Greece at the end of 2009 and still continues to hit households and businesses alike. The results from the panel regression analysis signify the role of corporate governance structures in determining the capital structure of the Greek listed firms. In particular, the empirical results reveal a negative impact of board size on debt levels, which is weakened during the debt crisis period. In contrast, the presence of outside directors provides the appropriate certification to use more debt. Finally, growth opportunities and profitability are the two firm-specific factors which effect was weakened during the financially-constraint period.

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