Performance appraisal is a process which help shareholders make informed and optimal investment decisions. In recent decades, a long stream of research has devoted particular attention to the importance and impact of financial decisions on firm performance and firm value. The present study thus is primarily concerned with investigating the association between free cash flow and institutional ow...

This paper examines the relationship between firm performance and ownership structure for listed and OTC manufacturing firms in Taiwan. By classifying ownership into three categories (managerial owners, institutional owners and the control group), the study addresses two related empirical issues—the commonly examined piecewise and the Granger causality relationships between ownership and perfor...

The aim of this paper is to identify and analyses the influence of shareholder ownership identity on payout ratio for a panel of Iran firms from 2002 and 2008. We find that there is a significant positive correlation between institutional ownership and payout ratio. The relation between payout ratio and individual ownership is negative. The most finding of the study indicates that Iranian compa...

We investigate whether foreign institutional ownership impacts corporate innovation. Using firm-level data from 30 countries in 2001-2010, we find that higher foreign institutional ownership is associated with more investment in R&D and patents. Using the exogenous increase in foreign institutional holdings that follows a firm’s addition to the Morgan Stanley Capital International World Index, ...

This paper examines whether the investment horizon of a firm’s institutional shareholders affects the extent of tax aggressiveness as proxied by a firm’s five-year cash effective tax rate and yearly permanent book-tax differences. Using a sample of firms with institutional ownership data from 1995-2008, we find more tax aggressiveness for firms held by short-term investors and less tax aggressi...

We examine how the ownership, analyst coverage and stock market valuation of a sample of U.S. firms vary with their environmental performance. Both “green” and “toxic” firms have a larger number of shareholders but a smaller percentage of institutional owners and ownership stakes relative to environmentally neutral firms. Nonetheless, toxic firms have higher institutional ownership than green f...

This study tests two opposing views of institutional investors—monitoring versus expropriation--by investigating whether institutional ownership is positively or negatively related to future firm-specific stock price crash risk. We present robust evidence that institutional ownership is positively associated with future stock price crash risk. After further classifying institutional investors i...

Firms with high levels of institutional ownership are more likely to be acquired. This paper shows that this positive correlation is due to ownership endogeneity. Institutional investors are better informed investors and buy acquisition targets (“selection”). After controlling for this ownership endogeneity, the presence of institutional investors reduces the probability of being acquired. Evid...