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Does institutional ownership influence firm performance? Evidence from China
Lin,Yongjia Rebecca1; Fu,Xiaoqing Maggie2
2017-05-01
Source PublicationInternational Review of Economics and Finance
ISSN10590560
Volume49Pages:17-57
Abstract

In recent decades, institutional investors have played an increasingly important role in China's stock markets, following a series of market-liberalizing reforms. This study uses a simultaneous equations model with a generalized method of moments estimator to investigate the effects of institutional ownership on firm performance in a new large sample of Chinese listed firms from 2004 to 2014. The results generally suggest that institutional ownership positively affects firm performance and are robust to accounting for deregulation, contemporaneous market conditions, and different stock market boards. However, not all institutional investors are active monitors and improve firm performance. In particular, the results indicate that pressure-insensitive, foreign and large institutional shareholders have greater positive effects on firm performance than pressure-sensitive, domestic, and small institutional shareholders. The results further suggest that institutional investors enhance shareholder value by attracting more analysts and reducing insider ownership (among other reasons), and these findings are robust to a series of sensitivity analyses.

KeywordChina Firm Performance Institutional Ownership
DOI10.1016/j.iref.2017.01.021
URLView the original
Indexed BySSCI
Language英语
WOS Research AreaBusiness & Economics
WOS SubjectBusiness, Finance ; Economics
WOS IDWOS:000403125500002
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Cited Times [WOS]:16   [WOS Record]     [Related Records in WOS]
Document TypeJournal article
CollectionDEPARTMENT OF FINANCE AND BUSINESS ECONOMICS
Corresponding AuthorLin,Yongjia Rebecca; Fu,Xiaoqing Maggie
Affiliation1.School of Business,Macau University of Science and Technology,,Taipa,Macao
2.Faculty of Business Administration,University of Macau,,Taipa,Macao
Corresponding Author AffilicationFaculty of Business Administration
Recommended Citation
GB/T 7714
Lin,Yongjia Rebecca,Fu,Xiaoqing Maggie. Does institutional ownership influence firm performance? Evidence from China[J]. International Review of Economics and Finance,2017,49:17-57.
APA Lin,Yongjia Rebecca,&Fu,Xiaoqing Maggie.(2017).Does institutional ownership influence firm performance? Evidence from China.International Review of Economics and Finance,49,17-57.
MLA Lin,Yongjia Rebecca,et al."Does institutional ownership influence firm performance? Evidence from China".International Review of Economics and Finance 49(2017):17-57.
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