 Stewardship, institutional investors monitoring, and firm value: Evidence from the United KingdomNghia Huu Nguyen and Cheng-Yi Shiu Journal of Multinational Financial Management, 2022, vol. 64, issue C Abstract: Stewardship encourages institutional investors to perform a monitoring function through cooperation and collective action. The United Kingdom was the first country to publish a Stewardship Code. This motivates us to investigate the monitoring role of institutional investors in the UK. We find that institutional ownership has a positive influence on firms' one-year future valuation and quality of corporate governance practices. The positive relationship identified is mainly driven by independent and long-term (ILT) institutional ownership. We additionally demonstrate that acquirers with higher ILT institutional ownership make better acquisition decisions. The performance of cross-border acquisitions does not differ from the performance of domestic deals. Overall, our results are consistent with the view that ILT institutional investors contribute to firm monitoring and promoting sound corporate governance practices, which can be attributed to their long-term investment horizons and arm’s-length relationships with investee companies. Keywords: Stewardship; Institutional investors; Monitoring; Corporate Governance (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:mulfin:v:64:y:2022:i:c:s1042444x22000044 DOI: 10.1016/j.mulfin.2022.100732 Access Statistics for this article Journal of Multinational Financial Management is currently edited by I. Mathur and G. G. Booth More articles in Journal of Multinational Financial Management from Elsevier |
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