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Which Institutional Investors Monitor? Evidence from Acquisition Activity

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  • Lily Qiu

Abstract

This paper shows that the presence of large public pension fund shareholders particularly reduces acquisitions by cash-rich and low-q firms, and by firms seeking to ``buy growth'', after controlling for ownership endogeneity, firm-level governance structure, and other firm characteristics. When firms with large public pension fund presence do acquire other firms, they perform relatively better in the long-run. Other institutional investors have either the opposite effect or no effect.

Suggested Citation

  • Lily Qiu, 2004. "Which Institutional Investors Monitor? Evidence from Acquisition Activity," Yale School of Management Working Papers amz2497, Yale School of Management, revised 01 Jun 2006.
  • Handle: RePEc:ysm:somwrk:amz2497
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    File URL: http://icfpub.som.yale.edu/publications/2497
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    References listed on IDEAS

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    Cited by:

    1. Jeon, Jin Q. & Lee, Cheolwoo & Moffett, Clay M., 2011. "Effects of foreign ownership on payout policy: Evidence from the Korean market," Journal of Financial Markets, Elsevier, vol. 14(2), pages 344-375, May.
    2. Henrik Cronqvist & RĂ¼diger Fahlenbrach, 2009. "Large Shareholders and Corporate Policies," Review of Financial Studies, Society for Financial Studies, vol. 22(10), pages 3941-3976, October.
    3. Bethel, Jennifer E. & Hu, Gang & Wang, Qinghai, 2009. "The market for shareholder voting rights around mergers and acquisitions: Evidence from institutional daily trading and voting," Journal of Corporate Finance, Elsevier, vol. 15(1), pages 129-145, February.
    4. Gu, Yuqi & Zhang, Ling, 2017. "The impact of the Sarbanes-Oxley Act on corporate innovation," Journal of Economics and Business, Elsevier, vol. 90(C), pages 17-30.

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