IDEAS home Printed from https://ideas.repec.org/p/cpr/ceprdp/18514.html
   My bibliography  Save this paper

Do Institutional Directors Matter?

Author

Listed:
  • Geng, Heng
  • Hau, Harald
  • Michaely, Roni
  • Nguyen, Binh

Abstract

The large increase in common institutional ownership has raised legitimate antitrust concerns. Although the precise channel of any potential influence on market outcomes is unclear, common board representation has been considered one of the most likely channels facilitating this influence. Using a novel dataset on shareholders’ board representation, we examine the role of common institutional directors (i.e., joint board representation by institutional shareholders) as a potential channel with four main findings. First, institutional board representation is extremely low relative to the extensive institutional ownership. Second, common institutional directors on rival firm boards are even rarer. Third, we fail to find evidence that institutional directors represent a relevant channel of influence for common institutional shareholders to coordinate firm policies. Fourth, we contrast institutional with non-institutional common shareholders and find that joint board representation by non-institutional shareholders is linked to higher firm profitability.

Suggested Citation

  • Geng, Heng & Hau, Harald & Michaely, Roni & Nguyen, Binh, 2023. "Do Institutional Directors Matter?," CEPR Discussion Papers 18514, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:18514
    as

    Download full text from publisher

    File URL: https://cepr.org/publications/DP18514
    Download Restriction: CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Institutional ownership;

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • L4 - Industrial Organization - - Antitrust Issues and Policies

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:18514. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://www.cepr.org .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.