Can Institutional Investors Fix the Corporate Governance Problem? Some Danish Evidence

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Can Institutional Investors Fix the Corporate Governance Problem? Some Danish Evidence

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dc.contributor.author Rose, Caspar en_US
dc.date.accessioned 2009-02-04T10:28:28Z
dc.date.available 2009-02-04T10:28:28Z
dc.date.issued 2006-03-30T00:00:00Z en_US
dc.identifier.uri http://hdl.handle.net/10398/7728
dc.description.abstract It has been advocated within corporate governance that institutional investors may discipline management in listed firms and thereby alleviate the free rider problem associated with dispersed ownership. This article tests this hypothesis using a sample of Danish listed firms during 1998-2001 seeking to determine, whether ownership by institutional investors impacts performance, measured by Tobin’s q. Using three stage least squares, it is shown that aggregate ownership by institutional investors does not influence firm performance. However, when decomposing the results, it is found that joint ownership by the largest two Danish institutional investors, has a significant negative impact on firm performance. Ownership by banks, and to a lesser, extent insurance companies significantly influences firm performance positively. The results somehow challenge the conventional wisdom, arguing that the black box view of institutional investors should be abandoned. Therefore, it is suggested that a more careful analysis should be devoted to each institutional investor’s own legal environment. JEL Classification: L25, G2 and G3 Keywords: Corporate governance, institutional investors, concentrated ownership, agency costs en_US
dc.format.extent 36 s. en_US
dc.language eng en_US
dc.relation.ispartofseries CKK Working paper;2006-001 en_US
dc.title Can Institutional Investors Fix the Corporate Governance Problem? Some Danish Evidence en_US
dc.type wp en_US
dc.accessionstatus modt06mar30 sømamo en_US
dc.contributor.corporation Copenhagen Business School. CBS en_US
dc.contributor.department Center for Kreditret og Kapitalmarkedsret en_US
dc.contributor.departmentshort CKK en_US
dc.contributor.departmentuk Centre for Financial Law en_US
dc.contributor.departmentukshort CKK en_US
dc.idnumber x656517424 en_US
dc.publisher.city København en_US
dc.publisher.year 2005 en_US


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