 Does common institutional ownership improve the similarity of behavior between firms? Evidence from ChinaChangyang Liu and Jincai He Pacific-Basin Finance Journal, 2024, vol. 83, issue C Abstract: This study investigates whether common institutional ownership (CIO) between firms in the same industry leads to more similar behavior between them in the context of firm investment. Using a sample of Chinese A-share listed firms from 2003 to 2021, we find, at the firm-pair level, that the stronger the CIO ties between two firms, the more similar their investment behavior. Further analysis shows that the impact of CIO on investment similarity is more pronounced in industries with lower market concentration (i.e., more intense market competition). CIO is not associated with underinvestment but is linked to higher investment efficiency and firm value. Common institutional investors with greater industry power can strengthen the negative relationship between CIO and investment dissimilarity. These results are consistent with the underlying logic of knowledge-sharing in the presence of CIO but are inconsistent with anti-competitive effects. Keywords: Common institutional ownership; Firm behavior; Investment; Anti-competitive; Knowledge-sharing (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:pacfin:v:83:y:2024:i:c:s0927538x23002962 DOI: 10.1016/j.pacfin.2023.102225 Access Statistics for this article Pacific-Basin Finance Journal is currently edited by K. Chan and S. Ghon Rhee More articles in Pacific-Basin Finance Journal from Elsevier |
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