Research on the Governance Role of Institutional Investors in Listed Companies Based on Panel Data Analysis

Author

Lu, Qian

Author_Institution

Sch. of Bus. Adm., Wuhan Textile Univ., Wuhan, China

fYear

2011

fDate

12-14 Aug. 2011

Firstpage

1

Lastpage

4

Abstract

The expropriation of minority shareholders by controlling shareholders is the central agency problem in listed Chinese companies. There has been an explosive development of institutional investors in China recent years but the governance role of institutional shareholders is controversial. This paper investigated the role of institutional shareholders in mitigating agency problem by testing the impact of mutual funds´ ownership on firm performance, using a sample for the period of 2004-2006. We find that equity ownership by mutual funds have positive effects on firm performance. The result is robust to two mainly measures of firm performance. Our finding suggests that institutional investors play a beneficial role in corporate governance and eventually sustainable development of listed companies.

Keywords

commerce; data analysis; management; sustainable development; Chinese companies; central agency problem; corporate governance; equity ownership; firm performance; governance role; institutional investors; listed companies; minority shareholders; mutual funds; panel data analysis; sustainable development; Companies; Correlation; Finance; Industries; Investments; Monitoring; Mutual funds;

fLanguage

English

Publisher

ieee

Conference_Titel

Management and Service Science (MASS), 2011 International Conference on

Conference_Location

Wuhan

Print_ISBN

978-1-4244-6579-8

Type

conf

DOI

10.1109/ICMSS.2011.5998539

Filename

5998539