This thesis includes one essay about the information production of institutional investors and two essays about the monitoring role of institutional investors. The first essay empirically examines the association between investor base and information production in the context of stock splits. Using the proportion of 13F filers as the proxy for the size of investor base, we show that three proxies for stock price informativeness, adjusted probability of information-based trading (AdjPIN), price non-synchronicity and probability of information-based trading (PIN), decrease significantly due to enlarged investor base after stock splits. It suggests that institutional investors are less incentivized to gather firm specific information when firm's investor base expands, which is consistent with the “risk sharing hypothesis”, proposed by Peress (2010). Furthermore, we find that the change of the price informativeness around splits is negatively related to the magnitude of positive return drifts following splits. This result is consistent with the notion that less information incorporated in stock prices results in a sluggish response by the market to corporate event. The second essay empirically identifies an external corporate governance mechanism through which the institutional trading improves firm value and disciplines managers from conducting value-destroying behaviors. We propose a reward-punishment intensity (RPI) measure based on institutional investors' absolute position changes, and find it is positively associated with firm's subsequent Tobin's Q. Importantly, we find that firms with higher RPI exhibit less subsequent empire building and earnings management. It suggests that the improved firm values can be attributed to the discipline effect of institutional trading on managers, which is in line with the argument of “Governance Through Trading". Furthermore, we find that the exogenous liquidity shock of decimalization augments the governance effect of institutional trading. We also find that the discipline effect is more pronounced for firms with lower institutional ownership concentration, higher stock liquidity, and higher managers' wealth-performance sensitivity, which further supports the notion that institutional trading could exert discipline on a manager. The third essay focuses on a particular type of institutional investor, short sellers, and explores the discipline effect of short selling on managerial empire building. Employing short-selling data from 2002-2012, we find a significantly negative association between the lending supply in the short-selling market and the subsequent abnormal capital investment. Besides, we find a positively significant association between the lending supply and the mergers and acquisitions announcement returns of acquiring firms. These results suggest that the short-selling potential could deter managers from conducting over-investment and value-destroying acquisitions. In addition, the discipline effect is stronger for firms with higher managers' wealth-performance-sensitivity, for firms with lower financial constraints, and for stock-financed acquisition deals. Finally, firms with higher lending supply also have higher Tobin's Q in the subsequent year. These results indicate that short-selling is another important external governance force. / published_or_final_version / Business / Doctoral / Doctor of Philosophy

Thesis (Ph. D.)--University of Texas at Austin, 2007. / Vita. Includes bibliographical references.

My dissertation finds that the effects of institutional trading on stock price efficiency are significant and complicated. On one hand, I present evidence that institutional trading in general improves price efficiency. In particular, major stock market anomalies such as stock return momentum, post earnings announcement drift, and the book-to-market effect are much stronger in stocks with lower institutional trading volume. On the other, some institutional trading behaviors could hamper stock price efficiency even though institutions are generally rational arbitrageurs. Specifically, I show that when institutions act as positive-feedback traders, their trading contributes to stock return momentum and hampers prices efficiency.

Thesis (Ph. D.)--University of Washington, 1995. / Vita. Includes bibliographical references (leaves [112]-120).

A research report submitted to the Faculty of Commerce, Law and Management, University of the Witwatersrand, Johannesburg, in partial fulfilment of the requirements for the degree of Masters of Commerce (Accountancy / Previous research findings suggest that companies within developed markets which report on environmental, social and governance (ESG) issues attract a long term oriented institutional investor base. Against this background, the purpose of this study was to assess whether this relationship holds true within an emerging market context. Using cross-sectional time series data for 114 Johannesburg Stock Exchange (JSE) listed companies over the period 2012 to 2016, this study investigated whether the integration of ESG factors in investor decision making has resulted in investments being held into the long term by institutional investors and whether this relationship varies between different sectors of the JSE. The results were based on a regression analysis which was performed employing data from the Thomson Reuters ASSET4 platform as a proxy for ESG reporting scores against institutional investor shareholdings. The results did not indicate a statistically meaningful relationship between ESG reporting and the long term oriented institutional investor base even at the industry level. The results did not appear to be consistent with similar studies in developed markets, partly as a consequence of the JSE comprising greater quasi institutional investors as compared to dedicated investors. The results suggest that institutional investor’s commitment to the United Nations Principles for Responsible Investment (UN PRI) and Code for Responsible Investing in South Africa (CRISA) is yet to translate into investments in JSE companies being held long term. These findings motivate for further academic analysis of ESG-long term investor relationship, to policy setters the results call for greater consideration to be given to policy changes or industry guidance in order to ensure that the objectives as set out by the UN PRI and CRISA are achieved. / NG (2020)

Thesis (Ph. D.)--Columbia University, 1993. / Includes bibliographical references (leaves 92-101).

Corporate governance refers to a complementary set of legal, economic and social institutions to protect the interests of corporate owners by securing long-term corporate stability. A corporate governance system is comprised of a wide range of practices and institutions, from accounting standards and laws concerning financial disclosure, through executive compensation, to the size and composition of corporate board all envisaging monitoring responsibility on the part of the investors to protect them from expropriation by managers. Managers’ power and prestige in running a large and powerful corporation give them superior access to inside information and thus a privileged position as compared to the numerous and dispersed shareholders. The principal concern of the present work is the UK-model of corporate governance and the role of institutional shareholders in the governance of their investee companies listed on the London Stock Exchange. The proportion of the listed UK equity market owned by major shareholders grew enormously between the early 1960s and 2008. Whereas in the early 1930s, individual investors had 80% of the securities traded on the London Stock Exchange, now the ownership structure of public listed companies has significantly changed so that institutional investors have become the dominant players on the British financial market with 88.7% share-ownership of listed companies. This significant growth of institutional ownership has coincided with the emergence of self-regulatory corporate governance practices. The British model has played a pioneering role for the development of a self-regulatory approach to corporate governance framework from the Code of Best Practices 1992 to the Combined Code 2008 and the UK Corporate Governance Code 2010 and the Stewardship Code 2010. The self-regulatory approach on the basis of the ‘comply or explain’ principle adopted by the British model has now been in operation for the last two decades. The operational flexibility of the ‘comply or explain’ approach not only encourages the companies to adopt the general spirit of the code rather than the letter but also takes into account the monitoring responsibility of the institutional investors. This latter feature of the UK approach is based on the assumption that institutions have an economically-rational self-interest to monitor and actively engage with their investee companies to evaluate the veracity of their disclosure statements and thus to protect their investments.The crucial question asked by this thesis, however, is why institutional investors are not behaving as the model expects them to and thus why they have in fact been acting as ‘absentee owners’. Their perfunctory monitoring behaviour by adopting a ‘box-ticking’ approach on the basis of a ‘comply or perform’ analysis appears to have contributed significantly to the financial crisis. This thesis moves on from this observation, however, in order to consider whether there is anything that can be done to improve the monitoring behaviour of institutional investors. In this regard, it begins by noting that institutional investors are not homogeneous; some are companies while others are trusts; they face different problems of collective action, short-termism, conflicts of interest and managerial manipulation. The thesis accordingly considers whether there are any existing powers and remedies within company law and trust law that could be brought to bear in order to encourage or even enforce improved monitoring by institutional investors within the UK’s corporate governance model, which even in the aftermath of the financial crisis remains steadfastly wedded to self-regulation.

Thesis (Ph. D.)--University of Wisconsin--Madison, 1972. / Typescript. Vita. eContent provider-neutral record in process. Description based on print version record. Includes bibliographical references.

Thesis (Ph. D.)--Washington State University, May 2009. / Title from PDF title page (viewed on June 1, 2009). "College of Business." Includes bibliographical references.

Thesis (Ph. D.)--University of British Columbia, 1999. / Includes bibliographical references (leaves 124-130).