Institutional investors by nationality and long-term investor value appropriation

Chune Young Chung and Jun Myung Song

Research in International Business and Finance, 2024, vol. 67, issue PB

Abstract: This study investigates the impact of institutional investors on firm value, concentrating specifically on the role of institutional monitoring by nationality in long-term investor-value appropriation (LIVA). The findings reveal a significant positive correlation between domestic institutional ownership and LIVA. Moreover, the presence of independent domestic institutional investors accentuates the strength of this relationship. Notably, this study demonstrates that domestic institutional monitoring significantly impacts firms with high information asymmetry, thus underscoring the monitoring costs associated with geographic distance. In summary, it reinforces the existing body of evidence supporting the monitoring function of domestic institutional investors in influencing firm decisions. It elucidates the variations in long-term firm value by delineating the distinct monitoring roles of domestic and foreign institutional investors.

Keywords: Domestic institutions; Foreign institutions; LIVA; Information uncertainty; Managerial behavior (search for similar items in EconPapers)
JEL-codes: G32 J28 J61 K32 (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:67:y:2024:i:pb:s0275531923002799

DOI: 10.1016/j.ribaf.2023.102153

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