Do institutional blockholders influence corporate investment? Evidence from emerging markets

Roberto Alvarez, Mauricio Jara Bertin and Carlos Pombo

No 15767, Documentos CEDE from Universidad de los Andes, Facultad de Economía, CEDE

Abstract: This paper examines the relation between firm investment ratios and institutional blockholder ownership for a sample of 6,300 publicly traded firms of 16 large emerging markets for the 2005–2014 period. Results show that independent, long-term, and local institutional investors boost investment ratios, consistent with the monitoring role and blockholder voice intervention hypotheses. The presence of institutional blockholders, regardless their monitoring involvement, reduces firm cash flow sensitivity ratios and thus decreasing firms’ financial constraints.

Keywords: Institutional Investors; Corporate Investment; Financial Constraints; Corporate Governance; Emerging Markets (search for similar items in EconPapers)
JEL-codes: C20 G00 G20 G30 (search for similar items in EconPapers)
Pages: 43
Date: 2017-10-03
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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https://repositorio.uniandes.edu.co/bitstream/handle/1992/8748/dcede2017-57.pdf

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Journal Article: Do institutional blockholders influence corporate investment? Evidence from emerging markets (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:col:000089:015767

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