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Institutional Investor Activism: Does the Portfolio Management Skill Matter?

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  • Carlos F. alves

    ()
    (CEMPRE, Faculdade de Economia, Universidade do Porto)

  • Victor Mendes

    ()
    (CMVM – Comissão do Mercado de Valores Mobiliários)

Abstract

Institutional investors are often seen as potential solutions for corporate governance problems and are requested to have a more active role in the monitoring and control of listed companies. In this paper we develop a model that, within a universal banking framework, allows one to conclude that, the greater the capacity of a financial group to generate capital inflows that react to the performance of mutual funds, the more the said attitude is likely to succeed. The paper also concludes that the efforts of supervisory authorities should be directed in particular to the relations between universal financial groups and companies in which these financial groups do not have a relevant stake.

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File URL: http://www.fep.up.pt/investigacao/workingpapers/05.07.30_WP184_carlosalves.pdf
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Bibliographic Info

Paper provided by Universidade do Porto, Faculdade de Economia do Porto in its series FEP Working Papers with number 184.

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Length: 19 pages
Date of creation: Jul 2005
Date of revision:
Handle: RePEc:por:fepwps:184

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Keywords: Corporate Governance; Institutional Investor Activism; Universal Banking;

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References

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  1. Goetzmann, William N & Peles, Nadav, 1997. "Cognitive Dissonance and Mutual Fund Investors," Journal of Financial Research, Southern Finance Association & Southwestern Finance Association, vol. 20(2), pages 145-58, Summer.
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