Institutional investor networks and firm value

Bajo, Emanuele; Croci, Ettore; Marinelli, Nicoletta

doi:10.1016/j.jbusres.2020.02.041

Cited by 58 publications

(28 citation statements)

References 84 publications

(137 reference statements)

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“…In this study design, participants determine the perception of collective corporate reputation by observing analyst recommendations and institutional and individual investors’ decisions. We distinguished institutional investors, as it is claimed that ‘central and more prestigious active institutional investors may serve as a certification provider’ for a company, confirming the possibility of increasing its value in the future [ 111 ].…”

Section: Methodsmentioning

confidence: 99%

Individual corporate reputation and perception of collective corporate reputation regarding stock market investments

Blajer-Gołębiewska

2021

PLoS ONE

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There are two different concepts of corporate reputation grounded in individual and collective perceptions, respectively. The aim of this study was to identify how these two ways of conceiving of corporate reputation affect investors’ decisions about whether or not to buy stock in a given company. As this problem tackles individual decision-making processes, we designed and applied an incentivised economic experiment based on vignette studies and focused on individual decisions of single investors. Subjects took part in an online game that imitates stock exchange conditions and that concerns corporate reputation and investing. We found that the individual propensity to invest is not directly based on an investor’s perception (rooted in historical share price and other objective metrics) of a firm’s reputation but rather on an investor’s subjective recognition of collective corporate reputation in the market. This suggests a need to rethink the popular measures of corporate reputation in the context of studies of stock market investor decisions.

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Section: Methodsmentioning

confidence: 99%

Individual corporate reputation and perception of collective corporate reputation regarding stock market investments

Blajer-Gołębiewska

2021

PLoS ONE

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“…Kepemilikan institusional yang aktif dapat meningkatkan nilai perusahaan di bandingkan jenis kepemilikan lainnya [1]. Kepemilikan institusional secara pasif dapat mencegah perilaku manajemen laba dalam kaitannya dengan nilai perusahaan di Korea Selatan [2].…”

Section: Pendahuluanunclassified

Untitled

2022

jakb

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The purpose of this research is to empirically identify the influence of earnings management and corporate governance toward firm value. Good corporate governance is measured by two types of institutional ownership: long-term/pressure-resistance and short-term/pressure-sensitive. The purposive sampling method is being utilized to do sampling on property, real estate & building construction firms which are listed at the Indonesian Stock Exchange (IDX) for the period of five years (2016)(2017)(2018)(2019)(2020). 53 firms that are suitable for the research with a total sample of 265 firm-years observasion. Weighted least square regression method is implemented to test hypothesizes. The result indicates that earnings management positively affect the firm value. In addition, market risk and sales growth able to increase firm value measured by Tobin's Q ratio. Implication on this research suggests an external governance mechanism derived from institutional long-term orientation (pensioun fund, endowment fund, investment fund, mutual fund anf foundations) and long-term orientation (banks, insurance firms and nonbank institutions) are unable to influence firm value in Indonesia.

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“…Network analysis has been widely applied in financial studies nowadays. Researchers have built networks based on relationships of major financial market participants, including firm executives (An et al, 2016; El‐Khatib et al, 2015), board members (Chuluun et al, 2017; Larcker et al, 2013; Renneboog & Zhao, 2014), bankers (He & Chen, 2016; Lux, 2016) and shareholders (Bajo et al, 2020; Baltakys et al, 2018; Li et al, 2019). Research on institutional investor networks can be divided into two categories: relational embedding and structural embedding.…”

Section: Literature Reviewmentioning

confidence: 99%

“…The documents (which are downloaded from Wind Financial database) contain the institutional investors and their equity holdings from 2010 to 2018. Following the method proposed by Bajo et al (2020), we construct an institutional co-holding network for each year using the equity connections among institutional investors. Nodes represent individual institutional investors and linkages represent the co-holding relationships between two institutional investors when they hold equity stakes in the same company.…”

Section: Introductionmentioning

confidence: 99%

“…Crane et al (2019) identify coordinating groups of investors (cliques) as those connected through the network of institutional holdings. More recent work by Bajo et al (2020) claims that an institutional investor may have several connections with other institutional investors merely because it invests in large companies, for example, those belonging to the S&P500 index. There is increasing evidence to suggest that information diffusion among the investor population influences trading behaviour and firm performance in the financial market (Oldham, 2019; Romano, 2021; Rossi et al, 2018; Wen et al, 2021).…”

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Collusion or monitoring? Connected institutional investors and stock price crash risk in China

Zhang

Liang

2022

Syst Res Behav Sci

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This paper investigates the impact of connected institutional investors on stock price crash risk. We document that the closer institutions are to the central position of the network, the greater the stock price crash risk, whereas the closer they are to the intermediary position, the smaller the stock price crash risk. Such results remain strong after conducting several robustness checks. Further evidences demonstrate that the collusion effect of central position, which is more pronounced for firms with higher insider ownership concentration, lower institutional ownership and lower regional marketization index, works through managers' asymmetric news disclosure, whereas the monitoring effect of intermediary position, which is more pronounced for firms with higher insider ownership concentration, higher institutional ownership and lower regional marketization index, works through better informativeness and control. Overall, our analyses provide insights into the relation between social embeddedness of individual economic activities and corporate governance.

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Institutional investor networks and firm value

Cited by 58 publications

References 84 publications

Individual corporate reputation and perception of collective corporate reputation regarding stock market investments

Individual corporate reputation and perception of collective corporate reputation regarding stock market investments

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Collusion or monitoring? Connected institutional investors and stock price crash risk in China

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