Institutional ownership and firm performance in the global shipping industry

Wolfgang Drobetz, Sebastian Ehlert and Henning Schröder

Transportation Research Part E: Logistics and Transportation Review, 2021, vol. 146, issue C

Abstract: We examine the effect of institutional investors on the valuation of listed shipping firms. Institutional investors have a positive influence on the market value of shipping firms, confirming that institutional ownership is a “universal” corporate governance mechanism. This valuation effect is more pronounced in firms dominated by institutional investors with a short-term investment horizon. It is also stronger in firms with high stock liquidity, suggesting that short-term investors, through the threat of exit, are able to mitigate agency conflicts and improve corporate governance. Investment regressions indicate that shipping firms with a larger fraction of short-term investors are better able to exploit growth opportunities.

Keywords: Institutional investor; Investment horizon; Shipping industry; Corporate governance; Firm value (search for similar items in EconPapers)
JEL-codes: G10 G30 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:transe:v:146:y:2021:i:c:s1366554520307985

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DOI: 10.1016/j.tre.2020.102152

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