Foreign institutional investors and the great productivity slowdown

Jan Philip Schain

No 379, DICE Discussion Papers from Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE)

Abstract: This article analyzes the impact of institutional investors on firm productivity duringthe financial crisis 2008/09 across European manufacturing industries. Using propen-sity score matching combined with a difference in differences estimator I find a positivesignificant effect of 2% of foreign institutional ownership. Employing a variety of prox-ies for financial constraints, the article shows that the effect is driven by industries,countries, and firms that are more financially constrained indicating that foreign insti-tutional ownership prevents the known productivity slowdown during the financial crisisby alleviating financial constraints.

Keywords: Institutional Investors; Financial Crisis; Productivity; Financial Constraints (search for similar items in EconPapers)
JEL-codes: D22 D24 F61 G01 G23 G32 L25 (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-cfn, nep-cwa, nep-eff, nep-fdg and nep-ifn
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:dicedp:379

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