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Institutional Investors (institutional + investor)
Selected AbstractsAn Empirical Assessment of Country Risk Ratings and Associated ModelsJOURNAL OF ECONOMIC SURVEYS, Issue 4 2004Suhejla Hoti Abstract., Country risk has become a topic of major concern for the international financial community over the last two decades. The importance of country ratings is underscored by the existence of several major country risk rating agencies, namely the Economist Intelligence Unit, Euromoney, Institutional Investor, International Country Risk Guide, Moody's, Political Risk Services, and Standard and Poor's. These risk rating agencies employ different methods to determine country risk ratings, combining a range of qualitative and quantitative information regarding alternative measures of economic, financial and political risk into associated composite risk ratings. However, the accuracy of any risk rating agency with regard to any or all of these measures is open to question. For this reason, it is necessary to review the literature relating to empirical country risk models according to established statistical and econometric criteria used in estimation, evaluation and forecasting. Such an evaluation permits a critical assessment of the relevance and practicality of the country risk literature. The paper also provides an international comparison of risk ratings for twelve countries from six geographic regions. These ratings are compiled by the International Country Risk Guide, which is the only rating agency to provide detailed and consistent monthly data over an extended period for a large number of countries. The time series data permit a comparative assessment of the international country risk ratings, and highlight the importance of economic, financial and political risk ratings as components of a composite risk rating. [source] Impact of the QFII Scheme on Investment-Cash Flow Sensitivity,ASIA-PACIFIC JOURNAL OF FINANCIAL STUDIES, Issue 3 2009Jung-Hua Hung Abstract Taiwan is an important emerging economy which has adopted a progressive strategy to open up its securities markets, mainly through the QFII (Qualified Foreign Institutional Investor) scheme. This paper examines Taiwan's QFII experience so as to determine whether the implementation of such a policy has helped reduce corporate investment-cash flow sensitivity. Empirical results suggest that the launching of the QFII program as an interim institutionalization strategy to attract foreign capital into Taiwan's securities markets has been successful in relaxing corporations' investment-cash flow sensitivity. [source] Behavioural Biases of Japanese Institutional Investors: fund management and corporate governanceCORPORATE GOVERNANCE, Issue 4 2005Megumi Suto This study examines the behavioural biases of Japanese institutional investors and discusses implications for their role in corporate governance, based on the findings of a questionnaire survey of fund managers carried out in 2003. Statistical analysis of the survey results reveals a short-term bias in fund managers' investment time horizons, herding and self-marketing to improve the appearance of portfolio performance under the pressure either of customers or of institutional restraints. We conclude that institutional investors' behaviour contradicts their role as shareholders. [source] Trustees, Institutional Investors and Ultimate BeneficiariesCORPORATE GOVERNANCE, Issue 3 2004Chris Mallin No abstract is available for this article. [source] Institutional Investors and Cross Border VotingCORPORATE GOVERNANCE, Issue 2 2003Article first published online: 19 MAR 200 No abstract is available for this article. [source] Editorial: Institutional Investors and the Growth of Global InfluenceCORPORATE GOVERNANCE, Issue 2 2002Christine Mallin [source] Institutional Investors and Shareholder LitigationFINANCIAL MANAGEMENT, Issue 2 2008Sergey S. Barabanov We examine whether institutional investors are able to avoid future litigation. Our results show that institutions provide a fiduciary role by decreasing or eliminating their positions in sued firms well before litigation begins. We also find that institutional groups with high monitoring ability (independent investment advisors and mutual funds) are more proactive in their trading behavior than are institutions with low monitoring ability (banks, insurance companies, and unclassified institutions such as endowments, foundations, and self-managed pension funds). We find that percentage changes in institutional ownership are correlated with public information available more than two quarters before litigation. [source] Institutional Investors and Information Asymmetry: An Event Study of Self-Tender OffersFINANCIAL REVIEW, Issue 2 2003Michele O'Neill G14/G20/G32 Abstract Our research compares the asymmetric information costs of firms with low levels of institutional ownership to those with high levels. We use self-tender offers as an information event. Our results show that higher institutional ownership, particularly a higher number of institutional investors, is associated with a lower degree of informed trading. These results persist even after we control for differences in trading activity among our sample firms. [source] Identifying and Attracting the "right" Investors: Evidence on the Behavior of Institutional InvestorsJOURNAL OF APPLIED CORPORATE FINANCE, Issue 4 2004Brian Bushee This article summarizes the findings of research the author has conducted over the past seven years that aims to answer a number of questions about institutional investors: Are there significant differences among institutional investors in time horizon and other trading practices that would enable such investors to be classified into types on the basis of their observable behavior? Assuming the answer to the first is yes, do corporate managers respond differently to the pressures created by different types of investors, and, by implication, are certain kinds of investors more desirable from corporate management's point of view? What kinds of companies tend to attract each type of investor, and how does a company's disclosure policy affect that process? The author's approach identifies three categories of institutional investors: (1) "transient" institutions, which exhibit high portfolio turnover and own small stakes in portfolio companies; (2) "dedicated" holders, which provide stable ownership and take large positions in individual firms; and (3) "quasi-indexers," which also trade infrequently but own small stakes (similar to an index strategy). As might be expected, the disproportionate presence of transient institutions in a company's investor base appears to intensify pressure for short-term performance while also resulting in excess volatility in the stock price. Also not surprising, transient investors are attracted to companies with investor relations activities geared toward forward-looking information and "news events," like management earnings forecasts, that constitute trading opportunities for such investors. By contrast, quasi-indexers and dedicated institutions are largely insensitive to shortterm performance and their presence is associated with lower stock price volatility. The research also suggests that companies that focus their disclosure activities on historical information as opposed to earnings forecasts tend to attract quasi-indexers instead of transient investors. In sum, the author's research suggests that changes in disclosure practices have the potential to shift the composition of a firm's investor base away from transient investors and toward more patient capital. By removing some of the external pressures for short-term performance, such a shift could encourage managers to establish a culture based on long-run value maximization. [source] Analyst Following, Institutional Investors and Pricing of Future Earnings: Evidence from KoreaJOURNAL OF INTERNATIONAL FINANCIAL MANAGEMENT & ACCOUNTING, Issue 3 2008Bobae Choi This paper examines the role of sophisticated investors in pricing future earnings in Korea. Using the future earnings response coefficient (FERC) model, we test the effect of analyst following and institutional ownership on the informativeness of stock returns for future earnings. We find that the informativeness of stock returns for future earnings, measured as the FERC, increases with the analyst following and institutional ownership. We also investigate how the recently introduced Regulation Fair Disclosure in Korea affects the informativeness of stock returns for future earnings and its relation with analyst following and institutional ownership. The results show that the regulation decreases the FERC in general and its relation with analyst following, suggesting that analysts' superior ability is impaired after the regulation. [source] Institutional Investors and Executive CompensationTHE JOURNAL OF FINANCE, Issue 6 2003Jay C. Hartzell We find that institutional ownership concentration is positively related to the pay-for-performance sensitivity of executive compensation and negatively related to the level of compensation, even after controlling for firm size, industry, investment opportunities, and performance. These results suggest that the institutions serve a monitoring role in mitigating the agency problem between shareholders and managers. Additionally, we find that clientele effects exist among institutions for firms with certain compensation structures, suggesting that institutions also influence compensation structures through their preferences. [source] ARE CHINESE STOCK MARKETS INCREASING INTEGRATION WITH OTHER MARKETS IN THE GREATER CHINA REGION AND OTHER MAJOR MARKETS?AUSTRALIAN ECONOMIC PAPERS, Issue 3 2007GARY GANG TIAN This paper investigates the cointegrating and long-term causal relationships between the Shanghai A and B-share market, and between these two markets and the Hong Kong, the Taiwanese, the Japanese and the US market of two sub periods between July 1993 and March 2007. On the basis of a new Granger non-causality test procedure developed by Toda-Yamamoto (1995) and Johansen's (1988) cointegration test, my results suggest that a long-term equilibrium relationship measured by cointegration has been merged between the Chinese A-share market and the other markets in greater China region as well as the US market during the post-crisis period which covers the period since Chinese A-share market was opened to the Qualified Foreign Institutional Investors (QFII) in 2002. I also found that the Shanghai A-share market uni-directionally Granger-causes the other regional markets after the Asian financial crisis, while the A-share market and Hong Kong H-share market have had a significant feedback relationship since then. However, I found no evidence there has been cointegrating relationship between Shanghai B-share market and any other market ever since the B-share market was opened to the local retail investors in 2001. [source] The Challenges of Socially Responsible Investment Among Institutional Investors: Exploring the Links Between Corporate Pension Funds and Corporate GovernanceBUSINESS AND SOCIETY REVIEW, Issue 1 2009LAURA ALBAREDA VIVÓ ABSTRACT During the last few decades, globalization of finance markets has come under increasing pressure to manage the many risks that companies face due to the negative impact that certain financial crises have had on securities quoted on the stock exchange. Simultaneously, there is a growing tendency among different institutional investors to take into account nonfinancial aspects,social, environmental, and ethical values,of company management. In this respect, increasing numbers of asset managers are aware of the importance of nonfinancial aspects of company management for finance markets. Asset managers integrate corporate social responsibility, sustainability policies and corporate governance strategies as indicators in risk management and the search for long-term investments. The largest segment of socially responsible investment (SRI) screened and mutual funds are portfolios that are privately managed on behalf of institutions. Socially responsible investors include private and public pension funds, mutual funds, and private accounts that are managed on behalf of institutional investors such as corporations, universities, hospitals, religious institutions, and nonprofit organizations, among others. The aim of this paper is to analyze the development of SRI-screened management corporate pension plans in the Spanish finance market. Spain is one of the European countries with a less developed SRI institutional market. Since SRI is still at the fledgling stage in the Spanish institutional market, this analysis is restricted to the awareness of SRI among a sample of the total number of corporate pension funds or schemes in Spain. The paper concludes with some proposals to encourage wider SRI acceptance and practice in Spain. [source] Are All Professional Investors Sophisticated?GERMAN ECONOMIC REVIEW, Issue 4 2010Lukas Menkhoff Institutional investors; investment advisors; individual investors; investment behavior Abstract. Existing empirical evidence is inconclusive as to whether professional investors show more sophisticated behavior than individual investors. Therefore, we study two important groups of professional investors and compare them with laymen by means of a survey covering about 500 investors. We find that some professionals, i.e. institutional investors, behave in a more sophisticated manner than laymen, whereas the less researched investment advisors seem to do even worse. Our survey approach complements available evidence due to its design: it compares professionals with (qualified) interested laymen, it covers six measures of sophisticated behavior, uses several control variables and strictly compares investment decisions in the private domain. [source] CORPORATE GOVERNANCE IN JAPAN AND THE UK: CODES, THEORY AND PRACTICEPACIFIC ECONOMIC REVIEW, Issue 5 2009Mitsuru Mizuno We reflect on the evolution of corporate governance and the role of institutional investors in enhancing governance in Japan and the UK. Japan places emphasis on stakeholder capitalism, whereas the UK places emphasis on shareholder capitalism. Nonetheless, in both countries, institutional investors have exerted significant influence on the evolution of corporate governance. Institutional investors in the UK have more power over company management than their Japanese counterparts, although it is alleged that these powers are not exercised to their best potential in either country. [source] The Effect of Board-Related Reforms on Investors' ConfidenceAUSTRALIAN ACCOUNTING REVIEW, Issue 2 2008Janet Lee We survey Australian institutional and individual investors regarding how board-related reforms in the Australian Stock Exchange Corporate Governance Council 2003 recommendations and changes to the Corporations Act 2001 in 2004 affect their confidence as investors. The overall results are consistent with suggestions that individual and institutional investors differ in their corporate governance preferences and expectations. The results reveal that, for both individual and institutional investors, the average investor's confidence is improved by increased independence of the board and its committees, increased disclosures of corporate governance information, and CEO and CFO responsibility for the integrity of financial statements. The effect is strongest for individual investors, who also expect greater time commitments by non-executive directors. Institutional investors appear to have more concern for directors' competence or networking. [source] Principles and Agents: CalPERS and corporate governance in JapanCORPORATE GOVERNANCE, Issue 1 2007Sanford M. Jacoby A growing literature discusses the convergence of national systems of corporate governance. Fostering convergence are activist institutional investors, especially from the United States. The following is a case study of one institutional investor , the giant pension fund, CalPERS , and its efforts to change governance in Japan over the past 15 years. CalPERS' involvement in Japan went through three stages: solo activism; cultivation of local partners; and, most recently, a shift from marketwide activism to company-level relational investing. Although CalPERS has had some success in changing Japanese corporate governance, economic and political factors have limited its influence and permitted the persistence of Japan's distinctive governance system. [source] Supply and Demand Shifts in the Shorting MarketTHE JOURNAL OF FINANCE, Issue 5 2007LAUREN COHEN ABSTRACT Using proprietary data on stock loan fees and quantities from a large institutional investor, we examine the link between the shorting market and stock prices. Employing a unique identification strategy, we isolate shifts in the supply and demand for shorting. We find that shorting demand is an important predictor of future stock returns: An increase in shorting demand leads to negative abnormal returns of 2.98% in the following month. Second, we show that our results are stronger in environments with less public information flow, suggesting that the shorting market is an important mechanism for private information revelation. [source] Universal Owners: challenges and opportunitiesCORPORATE GOVERNANCE, Issue 3 2007James Hawley This special issue of Corporate Governance is devoted to the concept of "universal ownership" (UO) and grows out of a conference of universal owners, institutional investors, investment professionals and academics held in April 2006 at Saint Mary's College of California, under the sponsorship of the Center for the Study of Fiduciary Capitalism (A report of the conference is available at http://www.fidcap.org). Four of the seven articles in this issue are based on papers presented at the conference, while an additional three (by Lydenberg, Syse and Gjessing, and Lippman et al.) were written specifically for this issue. The conference purposefully developed a practitioners' perspective on universal ownership and these articles reflect this orientation, although each article in its own way breaks new ground which academics, policy researchers and practitioners can and should develop. [source] Principles and Agents: CalPERS and corporate governance in JapanCORPORATE GOVERNANCE, Issue 1 2007Sanford M. Jacoby A growing literature discusses the convergence of national systems of corporate governance. Fostering convergence are activist institutional investors, especially from the United States. The following is a case study of one institutional investor , the giant pension fund, CalPERS , and its efforts to change governance in Japan over the past 15 years. CalPERS' involvement in Japan went through three stages: solo activism; cultivation of local partners; and, most recently, a shift from marketwide activism to company-level relational investing. Although CalPERS has had some success in changing Japanese corporate governance, economic and political factors have limited its influence and permitted the persistence of Japan's distinctive governance system. [source] Corporate Governance and Social Responsibility: a comparative analysis of the UK and the US,CORPORATE GOVERNANCE, Issue 3 2006Ruth V. Aguilera This paper argues that key differences between the UK and the US in the importance ascribed to a company's social responsibilities (CSR) reflect differences in the corporate governance arrangements in these two countries. Specifically, we analyse the role of a salient type of owner in the UK and the US, institutional investors, in emphasising firm-level CSR actions. We explore differences between institutional investors in the UK and the US concerning CSR, and draw on a model of instrumental, relational and moral motives to explore why institutional investors in the UK are becoming concerned with firms' social and environmental actions. We conclude with some suggestions for future research in this area. [source] Behavioural Biases of Japanese Institutional Investors: fund management and corporate governanceCORPORATE GOVERNANCE, Issue 4 2005Megumi Suto This study examines the behavioural biases of Japanese institutional investors and discusses implications for their role in corporate governance, based on the findings of a questionnaire survey of fund managers carried out in 2003. Statistical analysis of the survey results reveals a short-term bias in fund managers' investment time horizons, herding and self-marketing to improve the appearance of portfolio performance under the pressure either of customers or of institutional restraints. We conclude that institutional investors' behaviour contradicts their role as shareholders. [source] The Agency Problems, Firm Performance and Monitoring Mechanisms: the evidence from collateralised shares in TaiwanCORPORATE GOVERNANCE, Issue 3 2004Lanfeng Kao This paper indicates that there is an inverse relationship between collateralised shares and firm performance. We further show that this inverse relationship exists only in conglomerate firms. These findings imply that agency problems resulting from shares used as collateral by boards of directors are more serious in conglomerate firms than in non-conglomerate firms. Moreover, we provide evidence that monitoring by institutional investors, creditors and dividend policy can effectively reduce the agency problems of shares used as collateral and thus can improve firm performance. [source] Corporate Governance: And the Bargaining Power of Developing Countries to Attract Foreign InvestmentCORPORATE GOVERNANCE, Issue 2 2000Enrique Rueda-Sabater Following the rapid growth of foreign investment flows in the 1980s and 1990s some countries that had been dependent on official aid are now (even after the recent financial crises) obtaining most of their external financing from private sources. But low-income countries still receive little private capital flows. Arguing that corporate governance, broadly defined to include many business practices, is an important determinant of inward foreign investment this paper explores links between corporate Governance: And the ability of developing countries to attract foreign investment. It raises policy questions for developing countries and points to the need for complementary actions by government, businesses associations and institutional investors to promote corporate governance improvements. [source] Corporate environmental disclosures about the effects of climate changeCORPORATE SOCIAL RESPONSIBILITY AND ENVIRONMENTAL MANAGEMENT, Issue 6 2008Elizabeth Stanny Abstract We examine factors associated with the US S&P 500 firms' decisions to disclose information about the current and projected effects of climate change to institutional investors. Through the Carbon Disclosure Project, 315 institutional investors representing 41 trillion USD in assets asked the largest public firms to respond to a questionnaire about climate change. We explore whether firms' disclosures directed specifically to institutional investors are related to factors that have been found to explain voluntary disclosures to investors in general. In particular, we consider factors related to the level of scrutiny, since extant literature predicts that the cost of not disclosing increases with level of scrutiny. We find that size, previous disclosures and foreign sales are related to whether firms disclose information about climate change requested by institutional investors through the Carbon Disclosure Project. Copyright © 2008 John Wiley & Sons, Ltd and ERP Environment. [source] The Rise of a Global Infrastructure Market through Relational InvestingECONOMIC GEOGRAPHY, Issue 1 2009Morag Torrance abstract Infrastructure assets around the world are shifting from public to private ownership. This article investigates how institutional investors are investing beyond their traditional financial and geographic borders and are increasingly serving as owners of infrastructure assets. It shows how infrastructure assets have specific geographies of information embedded in their investment returns and discusses the growing interest of institutional investors in investing in the infrastructure landscape. While infrastructure investments are considered globally, opportunities depend on the availability of specialist information in the region of investment. The article demonstrates that the low-risk, geographically varied returns match the diversification objectives of pension fund portfolios. Relational investing is important in implementing strategies for investing in the infrastructure, since the bidding on and ensuing ownership and management of infrastructure assets around the world require a combination of financial, legal, and technical expertise. The article addresses three distinct economic geography literatures: the geography of finance, pension fund research, and emerging debates on "relational geometries." [source] The Effect of Fiduciary Standards on Institutions' Preference for Dividend-Paying StocksFINANCIAL MANAGEMENT, Issue 4 2008Kristine Watson Hankins Many researchers apparently believe that some institutional investors prefer dividend-paying stocks because they are subject to the "prudent man" (PM) standard of fiduciary responsibility, under which dividend payments provide prima facie evidence that an investment is prudent. Although this was once accurate for many institutions, during the 1990s most states replaced the PM standard with the less-stringent "prudent investor" (PI) rule, which evaluates the appropriateness of each investment in a portfolio context. Controlling for the general decline in dividend-paying stocks, we find that institutions reduced their holdings of dividend-paying stocks by 2% to 3% as the PI standard spread during the 1990s. Studies of asset pricing and corporate governance should no longer consider dividend payments when evaluating the actions of institutional investors. [source] Institutional Investors and Shareholder LitigationFINANCIAL MANAGEMENT, Issue 2 2008Sergey S. Barabanov We examine whether institutional investors are able to avoid future litigation. Our results show that institutions provide a fiduciary role by decreasing or eliminating their positions in sued firms well before litigation begins. We also find that institutional groups with high monitoring ability (independent investment advisors and mutual funds) are more proactive in their trading behavior than are institutions with low monitoring ability (banks, insurance companies, and unclassified institutions such as endowments, foundations, and self-managed pension funds). We find that percentage changes in institutional ownership are correlated with public information available more than two quarters before litigation. [source] Institutional Investors and Information Asymmetry: An Event Study of Self-Tender OffersFINANCIAL REVIEW, Issue 2 2003Michele O'Neill G14/G20/G32 Abstract Our research compares the asymmetric information costs of firms with low levels of institutional ownership to those with high levels. We use self-tender offers as an information event. Our results show that higher institutional ownership, particularly a higher number of institutional investors, is associated with a lower degree of informed trading. These results persist even after we control for differences in trading activity among our sample firms. [source] Determinants of Institutional Responses to Self,Tender OffersFINANCIAL REVIEW, Issue 3 2002Judith Swisher I examine how institutional investors respond to self,tender offers for common shares. I find that institutions sell more shares in larger offers and with higher proration factors. Institutions also sell more shares when officer and director holdings are not at risk in the offers. Banks, investment advisors, and other managers respond similarly, selling more shares in larger offers. Although institutions as a group do not respond differently by offer type, insurance companies and investment advisors sell more shares in fixed,price offers. Mutual funds, which differ from other types of institutions, sell more shares for firms with greater increases in leverage. [source] | |||||||||||||||||||||||||||||||