Which institutional investors matter for firm survival and performance?

Grigori Erenburg, Janet Smith and Richard Smith

The North American Journal of Economics and Finance, 2016, vol. 37, issue C, 348-373

Abstract: Using data that spans three decades, we assess the diverse roles of institutional investors in impacting survival and performance of chronically underperforming firms and contrast the results for consistently overperforming firms. We find material differences in investor roles and investment returns between these samples. Differentiating among institutional types, controlling for prior performance and attrition bias provides insights unattainable by examining aggregated holdings. For underperformers, results are negative for activist pension funds and long-term institutions, positive for activist hedge funds and short-term institutions, and mixed for institutional blockholders.

Keywords: Institutional investors; Corporate governance; Monitoring; Acquisition; Bankruptcy; Distressed firms (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecofin:v:37:y:2016:i:c:p:348-373

DOI: 10.1016/j.najef.2016.05.012

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