Do Institution Investors Exacerbate Managerial Myopia?

John J. McConnell and Sunil Wahal

Purdue University Economics Working Papers from Purdue University, Department of Economics

Abstract: This study analyzes corporate expenditures for property, plant and equipment (PP&E) and research and development (R&D) for over 2,500 firms from 1987 to 1994. We document a positive relation between expenditures for PP&E and R&D and institutional share ownership. This relation is robust to a variety of specifications. We examine the link between firm-level expenditures and institutional ownership by using lead-lag structures and changes in institutional ownership. The data do not support the contention that institutional investors cause corporate managers to behave myopically. Indeed, the data indicate that the presence of institutional shareholders allows managers to invest more in PP&E and R&D than would individual shareholders.

Pages: 32 pages
Date: 1998-06
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://business.purdue.edu/research/Working-papers-series/Year-1998/1112.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (https://business.purdue.edu/research/Working-papers-series/Year-1998/1112.pdf [301 Moved Permanently]--> https://business.purdue.edu/research/working-papers-series/Year-1998/1112.pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pur:prukra:1112

Access Statistics for this paper

More papers in Purdue University Economics Working Papers from Purdue University, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Business PHD ().