 Tournament incentives and institutional ownershipChee Seng Cheong, Chia-Feng (Jeffrey) Yu (), Ralf Zurbruegg and Paul Brockman International Review of Economics & Finance, 2021, vol. 74, issue C, 418-433 Abstract: This study examines the relationship between internal tournament competition and corporate ownership structure. Since sophisticated investors are more likely than naïve investors to understand the value-creating incentives of internal tournaments, we expect that tournament-oriented firms will attract greater ownership interest among institutional investors than individual investors. We first formalize this insight in a model and then test its empirical implications using 25 years of market data. We find strong support for our main hypothesis that internal tournament incentives are positively related to institutional ownership. This finding is robust to alternative measures of tournament competition and potential endogeneity issues. Overall, our results are consistent with the notion that institutional investors gravitate towards firms with stronger tournament competition. Keywords: Corporate tournaments; CEO Pay gap; Institutional holding (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:reveco:v:74:y:2021:i:c:p:418-433 DOI: 10.1016/j.iref.2021.03.022 Access Statistics for this article International Review of Economics & Finance is currently edited by H. Beladi and C. Chen More articles in International Review of Economics & Finance from Elsevier |
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