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Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/26710
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| Title: | THE IMPACT OF INSTITUTIONAL OWNERSHIP ON CORPORATE OPERATING PERFORMANCE |
| Authors: | Cornett, Marcia Millon
Marcus, Alan J.
Saunders, Anthony
Tehranian, Hassan |
| Issue Date: | 7-Nov-2003 |
| Series/Report no.: | S-CG-03-05 |
| Abstract: | This paper examines the relationship between institutional investor
involvement in and the operating performance of large firms. We confirm
a significant relationship between a firm’s operating cash flow
returns and both the percent of institutional stock ownership and the
number of institutional stockholders. However, the positive relationship
between the number of institutional investors holding stock and
operating cash flow returns is found only for pressure-insensitive
institutional investors (those with no business relationship with the
firm). The number of pressure-sensitive institutional investors (those
with an existing or potential business relationship with the firm) has
no impact on performance. These results suggest that institutional
investors that need to protect actual or promote potential business
relationships with firms in which they invest are compromised as
monitors of the firm, and lend credence to calls for greater
independence of board members from firms. |
| URI: | http://hdl.handle.net/2451/26710 |
| Appears in Collections: | Corporate Governance
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