The impact of institutional investors’ ownership on firm’s value and performance
(2022) NEKN02 20221Department of Economics
- Abstract
- Institutional investors and large investors play a crucial role as a governance mechanism to protect outsiders from excessive rent extraction by insiders. Where institutional investors can serve as a governance mechanism to intervene and discipline management, it also has several drawbacks and imperfections. This thesis investigates the principal-agent problem and empirically investigates how institutional investors impact shareholder value and firm operating performance on the Swedish market for large- and small-cap firms listed on the Stockholm Stock Exchange. The sample consists of 102 large-cap and 78 small-cap firms, including financial and non-financial except investment companies, which are observed quarterly from 2014 to 2021. The... (More)
- Institutional investors and large investors play a crucial role as a governance mechanism to protect outsiders from excessive rent extraction by insiders. Where institutional investors can serve as a governance mechanism to intervene and discipline management, it also has several drawbacks and imperfections. This thesis investigates the principal-agent problem and empirically investigates how institutional investors impact shareholder value and firm operating performance on the Swedish market for large- and small-cap firms listed on the Stockholm Stock Exchange. The sample consists of 102 large-cap and 78 small-cap firms, including financial and non-financial except investment companies, which are observed quarterly from 2014 to 2021. The instrumental variable approach results in a negative impact from institutional investors on large-cap firm operating performance. Additionally, institutional investors have a negative impact on firm operating performance for small-cap firms. Consequently, total institutional investors impact shareholder value negatively. Furthermore, the thesis finds that several categories of institutional investors contribute to shareholder value and firm performance differently. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/9087931
- author
- Hoang, Phuong Thao LU and Olsson, Markus LU
- supervisor
- organization
- course
- NEKN02 20221
- year
- 2022
- type
- H1 - Master's Degree (One Year)
- subject
- keywords
- Corporate governance, delegated monitoring, agency problem, institutional investors, shareholder value
- language
- English
- id
- 9087931
- date added to LUP
- 2022-10-10 09:35:29
- date last changed
- 2022-10-10 09:35:29
@misc{9087931, abstract = {{Institutional investors and large investors play a crucial role as a governance mechanism to protect outsiders from excessive rent extraction by insiders. Where institutional investors can serve as a governance mechanism to intervene and discipline management, it also has several drawbacks and imperfections. This thesis investigates the principal-agent problem and empirically investigates how institutional investors impact shareholder value and firm operating performance on the Swedish market for large- and small-cap firms listed on the Stockholm Stock Exchange. The sample consists of 102 large-cap and 78 small-cap firms, including financial and non-financial except investment companies, which are observed quarterly from 2014 to 2021. The instrumental variable approach results in a negative impact from institutional investors on large-cap firm operating performance. Additionally, institutional investors have a negative impact on firm operating performance for small-cap firms. Consequently, total institutional investors impact shareholder value negatively. Furthermore, the thesis finds that several categories of institutional investors contribute to shareholder value and firm performance differently.}}, author = {{Hoang, Phuong Thao and Olsson, Markus}}, language = {{eng}}, note = {{Student Paper}}, title = {{The impact of institutional investors’ ownership on firm’s value and performance}}, year = {{2022}}, }