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Corporate Governance And Firm Performance: Evidence From Institutional Investors And Proxy Voting In Korea

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  • LEE, SANGLAE

Abstract

This paper investigates the role of institutional investors as corporate monitors by analyzing the relationship between proxy voting decisions and firm performance in Korea. We find that institutional investors support more proposals when firm performance is strong. They are more likely to support the proposals when ownership of the blockholder and foreign investors are high. It suggests that institutional investors monitor firms through active voting on the proposals relating to performance. On the contrary, National Pension Service' affirmative voting decisions is negatively related to firm performance. Furthermore, we also find that institutional investors' voting is significantly related to the long-term performance and impact the pass of proposal and they more carefully monitor financially distressed firm.

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  • Lee, Sanglae, 2015. "Corporate Governance And Firm Performance: Evidence From Institutional Investors And Proxy Voting In Korea," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 56(1), pages 35-53, June.
    • Handle: RePEc:hit:hitjec:v:56:y:2015:i:1:p:35-53
    DOI: 10.15057/27195
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    Cited by:

    1. Sang Cheol Lee & Mooweon Rhee & Jongchul Yoon, 2018. "Foreign Monitoring and Audit Quality: Evidence from Korea," Sustainability, MDPI, vol. 10(9), pages 1-22, September.

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    More about this item

    Keywords

    proxy voting; firm performance; corporate governance; institutional investors; National Pension Service;
    All these keywords.

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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