Institutional investors and corporate governance

Amil Dasgupta, Vyacheslav Fos and Zacharias Sautner

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: We provide a comprehensive overview of the role of institutional investors in corporate governance with three main components. First, we establish new stylized facts documenting the evolution and importance of institutional ownership. Second, we provide a detailed characterization of key aspects of the legal and regulatory setting within which institutional investors govern portfolio firms. Third, we synthesize the evolving response of the recent theoretical and empirical academic literature in finance to the emergence of institutional investors in corporate governance. We highlight how the defining aspect of institutional investors – the fact that they are financial intermediaries – differentiates them in their governance role from standard principal blockholders. Further, not all institutional investors are identical, and we pay close attention to heterogeneity amongst institutional investors as blockholders.

Keywords: institutional investors; corporate governance; exit; voice; shareholder activism; proxy voting advisors (search for similar items in EconPapers)
JEL-codes: F3 G3 (search for similar items in EconPapers)
Pages: 119 pages
Date: 2021-09-20
New Economics Papers: this item is included in nep-ban, nep-cwa and nep-isf
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Published in Foundations and Trends in Finance, 20, September, 2021, 12(4), pp. 276 - 394. ISSN: 1567-2395

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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:112114

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