Cross-country determinants of institutional investors’ investment horizons

Simon Döring, Wolfgang Drobetz, Sadok El Ghoul, Omrane Guedhami and Henning Schröder

Finance Research Letters, 2021, vol. 39, issue C

Abstract: Using a large dataset of firms from 35 countries, we study the country-level determinants of institutional investors’ investment horizons. We show that an equity investor-friendly institutional environment is more important for long-term investors, while short-term investors seem to be less concerned about the quality of the financial and legal environment. Beyond the financial and legal structure, the cultural environment and economic policy uncertainty in a country are other important determinants of investor horizons. These findings improve our understanding of cross-country differences in the corporate governance role, i.e., engagement vs. exit, of institutional investors.

Keywords: Institutional investors; Investment horizons; Churn rates; Institutional environments (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:39:y:2021:i:c:s1544612320304517

DOI: 10.1016/j.frl.2020.101641

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