Lecture: Institutional Ownership Stability
Professor Elyas Elyasiani from Temple University will be the guest speaker at this week's Finance Seminar. All are invited to attend.
The seminar's topic will be "Distribution of Institutional Ownership and Corporate Firm Performance."
Abstract: We investigate the association between corporate firm performance and the level and stability of institutional ownership within a simultaneous equation model. The main institutional ownership stability measures used include ownership persistence and the time-lengths over which institutional investors hold non-zero shares or maintain their shareholding. The findings indicate that there is a positive relationship between firm performance and institutional ownership stability, accounting for the shareholding proportion. This relationship is robust to the employment of ownership turnover measures used in the literature and consistent with the view that stable institutional investors play an effective role in monitoring. When institutional investors are disaggregated into pressure-insensitive (independent) and pressure-sensitive categories stable shareholding of each group has a positive impact on performance with the first group exerting a larger effect. The effect is also stronger for smaller firms, which are subject to greater information asymmetry. The channels of the effect include increased long-term investment, and increased incentive-based compensation.
See more information about Professor Elyas Elyasiani.
