Corporate Governance Structure and Institutional Investment: Evidence from a Developing Country

Johnson Nkem Nwaiwu

Asian Journal of Economics and Empirical Research, 2014, vol. 1, issue 2, 48-56

Abstract: In recent times, the corporate governance structure debate has tended to expand the objective of business beyond the maximization of shareholders’ wealth to include discharge of duty to the society. This study examines the influence of corporate governance structure and institutional investment of 32 listed companies on the NSE, covering the period of 2006-2010. The postulated hypotheses were tested, using multiple linear regression (MLR) analysis. The empirical results showed no significant influence between corporate governance and institutional investors. Rather, institutional investors exert a significant and, positive influence on corporate governance structure. The studies advocate that given more attention to the large institutional investment, since there is a positive relationship between corporate governance structure and the whole number of institutional investors. And a negative influence between corporate governance structure and volume of institutional investors. To have better monitoring by large institutional investors, they should set up board of investee companies in order to have wider bird’s view image the capital market authority and NSE should set regulations that prevent a percentage holding of share in the companies to protect the control by few institutional investors. The study also recommends further investigations into the influence of corporate governance structure and institutional investors, using larger sample size, covering more years, and including particularly the banking sectors that has witnessed major reforms since 2005 and plays a critical role in the economic development of Nigeria.

Keywords: Corporate governance structure; Developing country; Institutional investment; Number of institutional investors; Value of institutional investors; Nigeria; Quoted companies. (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:aoj:ajeaer:v:1:y:2014:i:2:p:48-56:id:193

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