Institutional investor heterogeneity and firm valuation: Evidence from Latin America

Maria Camila De-la-Hoz and Carlos Pombo

Emerging Markets Review, 2016, vol. 26, issue C, 197-221

Abstract: This article analyses how the corporate valuation of Latin American firms is affected by the presence of a blockholder institutional investor. The study uses a data set of 562 firms from six Latin American countries for the 1997–2011 period. We found that the presence of an institutional investor has a positive effect of 8% on firm value, which increases to 21% for the cases where there is blockholder coalition with an institutional investor. After dividing the sample by investor type, we found that independent institutional ownership implies a positive premium on firms' Tobin's Q, while the presence of a grey investor has a negative effect on firm valuation.

Keywords: Institutional investors; Firm valuation; Latin America (search for similar items in EconPapers)
JEL-codes: G23 G32 N16 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ememar:v:26:y:2016:i:c:p:197-221

DOI: 10.1016/j.ememar.2015.12.001

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