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Institutional Investors and Firm Valuation: Evidence from Latin America

Carlos Pombo () and María Camila De la hoz
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María Camila De la hoz: School of Management, Universidad de Los Andes

No 40, Galeras. Working Papers Series from Universidad de Los Andes. Facultad de Administración. School of Management

Abstract: This article analyses how the corporate valuation of Latin American firms is affected by the presence of an institutional blockholder investor. The study uses a data set of 562 firms from six Latin American countries for the period 1997 to 2011. As in similar studies, we found that the presence of an institutional investor has a positive effect of 8% on firm value. After dividing the sample by investor type, we found that the presence of a grey investor (pension funds and insurance companies) has a negative effect on firm valuation, while independent investors (banks, investment and mutual funds) have a positive effect on firm valuation. This is one of the first studies to evaluate the relationship between investor activism and corporate valuation in Latin American economies with the most significant capital market development

Keywords: Institutional investors; firm valuation; Latin America (search for similar items in EconPapers)
JEL-codes: G23 G32 N16 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2015-05-01
New Economics Papers: this item is included in nep-cfn and nep-lam
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