Does Institutional Ownership Create Values? The New Zealand Case

Does Institutional Ownership Create Values? The New Zealand Case

This study investigates the relationship between institutional ownership and corporate performance of New Zealand non-financial companies. We find that total institutional ownership increases firm values as measured by Tobin's Q and operational return on equity. The top institution's share...

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Veröffentlicht in:Quarterly journal of finance and accounting 2008-09, Vol.47 (4), p.109-124
Hauptverfasser: Chen, Jianguo, Blenman, Lloyd, Chen, Dar-Hsin
Format: Artikel
Sprache:eng
Schlagworte:
Analysis
Book value
Business management
Business structures
Financial economics
Financial management
Investors
Manager behavior
Rate of return
Regression analysis
Shareholder activism
Shareholders
Stock shares
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Zusammenfassung:This study investigates the relationship between institutional ownership and corporate performance of New Zealand non-financial companies. We find that total institutional ownership increases firm values as measured by Tobin's Q and operational return on equity. The top institution's share ratio is negatively related to measurements of firm value. Institutional investors can make a positive contribution by cost-effective monitoring of management's behavior. The results are consistent with Cornett (2004) and the Federal Reserve Financial Economists Roundtable Statement (1998).
ISSN:1939-8123