IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

Dominant institutional owners and firm value

  • Ruiz-Mallorquí, María Victoria
  • Santana-Martín, Domingo J.
Registered author(s):

    This research analyzes the impact of control by dominant institutional owners (banking institutions and investment funds) on firm value. The analysis considers the level of voting rights in the hands of the dominant institutional owner and other large shareholders. The results reveal a different effect on value depending on whether the dominant institutional investor is a banking institution or an investment fund. Moreover, the results show that the presence of other large shareholders affects firm value when a dominant institutional owner controls the firm.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL: http://www.sciencedirect.com/science/article/B6VCY-50KRYP9-2/2/83f847e56ccc4b499c581758fd0d27db
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Article provided by Elsevier in its journal Journal of Banking & Finance.

    Volume (Year): 35 (2011)
    Issue (Month): 1 (January)
    Pages: 118-129

    as
    in new window

    Handle: RePEc:eee:jbfina:v:35:y:2011:i:1:p:118-129
    Contact details of provider: Web page: http://www.elsevier.com/locate/jbf

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

    as in new window
    1. Kester, W Carl, 1992. "Industrial Groups as Systems of Contractual Governance," Oxford Review of Economic Policy, Oxford University Press, vol. 8(3), pages 24-44, Autumn.
    2. McConnell, John J. & Servaes, Henri, 1990. "Additional evidence on equity ownership and corporate value," Journal of Financial Economics, Elsevier, vol. 27(2), pages 595-612, October.
    3. Seifert, Bruce & Gonenc, Halit & Wright, Jim, 2005. "The international evidence on performance and equity ownership by insiders, blockholders, and institutions," Journal of Multinational Financial Management, Elsevier, vol. 15(2), pages 171-191, April.
    4. Burkart, Mike & Panunzi, Fausto & Shleifer, Andrei, 2002. "Family Firms," CEPR Discussion Papers 3234, C.E.P.R. Discussion Papers.
      • Mike Burkart & Fausto Panunzi & Andrei Shleifer, 2003. "Family Firms," Journal of Finance, American Finance Association, vol. 58(5), pages 2167-2202, October.
    5. Barclay, Michael J. & Holderness, Clifford G. & Pontiff, Jeffrey, 1993. "Private benefits from block ownership and discounts on closed-end funds," Journal of Financial Economics, Elsevier, vol. 33(3), pages 263-291, June.
    6. Donghui Li & Fariborz Moshirian & Peter Kien Pham & Jason Zein, 2006. "When Financial Institutions Are Large Shareholders: The Role of Macro Corporate Governance Environments," Journal of Finance, American Finance Association, vol. 61(6), pages 2975-3007, December.
    7. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
    8. Demsetz, Harold & Villalonga, Belen, 2001. "Ownership structure and corporate performance," Journal of Corporate Finance, Elsevier, vol. 7(3), pages 209-233, September.
    9. Jeremy Edwards & Sheilagh Ogilvie, 1996. "Universal banks and German industrialization: a reappraisal," Economic History Review, Economic History Society, vol. 49(3), pages 427-446, 08.
    10. Rafael LaPorta & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert W. Vishny, . "Law and Finance," Working Paper 19451, Harvard University OpenScholar.
    11. Andrei Shleifer & Robert W. Vishny, 1996. "A Survey of Corporate Governance," NBER Working Papers 5554, National Bureau of Economic Research, Inc.
    12. Cornett, Marcia Millon & Marcus, Alan J. & Saunders, Anthony & Tehranian, Hassan, 2007. "The impact of institutional ownership on corporate operating performance," Journal of Banking & Finance, Elsevier, vol. 31(6), pages 1771-1794, June.
    13. King, Michael R. & Santor, Eric, 2008. "Family values: Ownership structure, performance and capital structure of Canadian firms," Journal of Banking & Finance, Elsevier, vol. 32(11), pages 2423-2432, November.
    14. Shleifer, Andrei & Vishny, Robert W., 1986. "Large Shareholders and Corporate Control," Scholarly Articles 3606237, Harvard University Department of Economics.
    15. Villalonga, Belen & Amit, Raphael, 2006. "How do family ownership, control and management affect firm value?," Journal of Financial Economics, Elsevier, vol. 80(2), pages 385-417, May.
    16. Duggal, Rakesh & Millar, James A., 1994. "Institutional investors, antitakeover defenses and success of hostile takeover bids," The Quarterly Review of Economics and Finance, Elsevier, vol. 34(4), pages 387-402.
    17. David Roodman, 2009. "A Note on the Theme of Too Many Instruments," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 71(1), pages 135-158, 02.
    18. Farshid Navissi & Vic Naiker, 2006. "Institutional ownership and corporate value," Managerial Finance, Emerald Group Publishing, vol. 32(3), pages 247-256.
    19. Barucci, Emilio & Mattesini, Fabrizio, 2008. "Bank shareholding and lending: Complementarity or substitution? Some evidence from a panel of large Italian firms," Journal of Banking & Finance, Elsevier, vol. 32(10), pages 2237-2247, October.
    20. Kroszner, Randall S. & Strahan, Philip E., 2001. "Bankers on boards: *1: monitoring, conflicts of interest, and lender liability," Journal of Financial Economics, Elsevier, vol. 62(3), pages 415-452, December.
    21. Ãscar López-de-Foronda & Félix J. López-Iturriaga & Marcos Santamaría-Mariscal, 2007. "Ownership Structure, Sharing of Control and Legal Framework: international evidence," Corporate Governance: An International Review, Wiley Blackwell, vol. 15(6), pages 1130-1143, November.
    22. Yuan, Rongli & Xiao, Jason Zezhong & Zou, Hong, 2008. "Mutual funds' ownership and firm performance: Evidence from China," Journal of Banking & Finance, Elsevier, vol. 32(8), pages 1552-1565, August.
    23. Borokhovich, Kenneth A & Brunarski, Kelly & Harman, Yvette S & Parrino, Robert, 2006. "Variation in the Monitoring Incentives of Outside Stockholders," Journal of Law and Economics, University of Chicago Press, vol. 49(2), pages 651-80, October.
    24. Elena Zoido, 1998. "Un estudio de las participaciones accionariales de los bancos en las empresas españolas," Investigaciones Economicas, Fundación SEPI, vol. 22(3), pages 427-467, September.
    25. Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer, 1998. "Corporate Ownership Around the World," Harvard Institute of Economic Research Working Papers 1840, Harvard - Institute of Economic Research.
    26. Ingo Walter, 1997. "Universal Banking: A Shareholder Value Perspective," New York University, Leonard N. Stern School Finance Department Working Paper Seires 96-40, New York University, Leonard N. Stern School of Business-.
    27. La Porta, Rafael & Lopez-de-Silanes, Florencio & Schleifer, Andrei & Vishny, Robert, 2001. "Investor Protection and Corporate Governance," Working Paper Series rwp01-017, Harvard University, John F. Kennedy School of Government.
    28. Alvaro Cuervo, 2002. "Corporate Governance Mechanisms: a plea for less code of good governance and more market control," Corporate Governance: An International Review, Wiley Blackwell, vol. 10(2), pages 84-93, 04.
    29. Julio Pindado & Chabela de la Torre, 2006. "The Role of Investment, Financing and Dividend Decisions in Explaining Corporate Ownership Structure: Empirical Evidence from Spain," European Financial Management, European Financial Management Association, vol. 12(5), pages 661-687.
    30. Mauricio Jara-Bertin & Félix J. López-Iturriaga & Ãscar López-de-Foronda, 2008. "The Contest to the Control in European Family Firms: How Other Shareholders Affect Firm Value," Corporate Governance: An International Review, Wiley Blackwell, vol. 16(3), pages 146-159, 05.
    31. Stijn Claessens & Simeon Djankov & Joseph P. H. Fan & Larry H. P. Lang, 2002. "Disentangling the Incentive and Entrenchment Effects of Large Shareholdings," Journal of Finance, American Finance Association, vol. 57(6), pages 2741-2771, December.
    32. Gorton, Gary & Schmid, Frank A., 2000. "Universal banking and the performance of German firms," Journal of Financial Economics, Elsevier, vol. 58(1-2), pages 29-80.
    33. Elyasiani, Elyas & Jia, Jingyi (Jane) & Mao, Connie X., 2010. "Institutional ownership stability and the cost of debt," Journal of Financial Markets, Elsevier, vol. 13(4), pages 475-500, November.
    34. Chen, Xia & Harford, Jarrad & Li, Kai, 2007. "Monitoring: Which institutions matter?," Journal of Financial Economics, Elsevier, vol. 86(2), pages 279-305, November.
    35. María Gutiérrez & Josep A. Tribo, 2004. "Private benefits extraction in closely-held corporations: The case for multiple large shareholders," Business Economics Working Papers wb044315, Universidad Carlos III, Departamento de Economía de la Empresa.
    36. Jeremy S. S. Edwards & Alfons J. Weichenrieder, 2004. "Ownership Concentration and Share Valuation," German Economic Review, Verein für Socialpolitik, vol. 5(2), pages 143-171, 05.
    37. Claessens, Stijn & Djankov, Simeon & Lang, Larry H. P., 2000. "The separation of ownership and control in East Asian Corporations," Journal of Financial Economics, Elsevier, vol. 58(1-2), pages 81-112.
    38. Arellano, Manuel & Bond, Stephen, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Wiley Blackwell, vol. 58(2), pages 277-97, April.
    39. Elyasiani, Elyas & Jia, Jingyi Jane, 2008. "Institutional ownership stability and BHC performance," Journal of Banking & Finance, Elsevier, vol. 32(9), pages 1767-1781, September.
    40. Walter, Ingo, 1997. "Universal banking: A shareholder value perspective," European Management Journal, Elsevier, vol. 15(4), pages 344-360, August.
    41. Richard Blundell & Steve Bond, 1995. "Initial conditions and moment restrictions in dynamic panel data models," IFS Working Papers W95/17, Institute for Fiscal Studies.
    42. Kaplan, Steven N. & Minton, Bernadette A., 1994. "Appointments of outsiders to Japanese boards: Determinants and implications for managers," Journal of Financial Economics, Elsevier, vol. 36(2), pages 225-258, October.
    43. Pound, John, 1988. "Proxy contests and the efficiency of shareholder oversight," Journal of Financial Economics, Elsevier, vol. 20(1-2), pages 237-265, January.
    44. Cho, Myeong-Hyeon, 1998. "Ownership structure, investment, and the corporate value: an empirical analysis," Journal of Financial Economics, Elsevier, vol. 47(1), pages 103-121, January.
    45. Maury, Benjamin & Pajuste, Anete, 2005. "Multiple large shareholders and firm value," Journal of Banking & Finance, Elsevier, vol. 29(7), pages 1813-1834, July.
    46. Holtz-Eakin, Douglas & Newey, Whitney & Rosen, Harvey S, 1988. "Estimating Vector Autoregressions with Panel Data," Econometrica, Econometric Society, vol. 56(6), pages 1371-95, November.
    47. Brickley, James A. & Lease, Ronald C. & Smith, Clifford Jr., 1988. "Ownership structure and voting on antitakeover amendments," Journal of Financial Economics, Elsevier, vol. 20(1-2), pages 267-291, January.
    48. Morck, Randall & Shleifer, Andrei & Vishny, Robert W., 1988. "Management ownership and market valuation : An empirical analysis," Journal of Financial Economics, Elsevier, vol. 20(1-2), pages 293-315, January.
    49. Thomsen, Steen & Pedersen, Torben & Kvist, Hans Kurt, 2006. "Blockholder ownership: Effects on firm value in market and control based governance systems," Journal of Corporate Finance, Elsevier, vol. 12(2), pages 246-269, January.
    50. George J. Benston, 1994. "Universal Banking," Journal of Economic Perspectives, American Economic Association, vol. 8(3), pages 121-143, Summer.
    51. Clifford, Christopher P., 2008. "Value creation or destruction? Hedge funds as shareholder activists," Journal of Corporate Finance, Elsevier, vol. 14(4), pages 323-336, September.
    52. Faccio, Mara & Lang, Larry H. P., 2002. "The ultimate ownership of Western European corporations," Journal of Financial Economics, Elsevier, vol. 65(3), pages 365-395, September.
    53. Steinherr, A. & Huveneers, Ch., 1994. "On the performance of differently regulated financial institutions: Some empirical evidence," Journal of Banking & Finance, Elsevier, vol. 18(2), pages 271-306, January.
    54. Marco Pagano & Ailsa Röell, 1998. "The Choice Of Stock Ownership Structure: Agency Costs, Monitoring, And The Decision To Go Public," The Quarterly Journal of Economics, MIT Press, vol. 113(1), pages 187-225, February.
    55. Elyasiani, Elyas & Jia, Jingyi, 2010. "Distribution of institutional ownership and corporate firm performance," Journal of Banking & Finance, Elsevier, vol. 34(3), pages 606-620, March.
    Full references (including those not matched with items on IDEAS)

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:eee:jbfina:v:35:y:2011:i:1:p:118-129. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.