Do institutional blockholders influence corporate investment? evidence from emerging markets
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2018Metadata
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Álvarez Espinoza, Roberto
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Do institutional blockholders influence corporate investment? evidence from emerging markets
Abstract
This paper examines the relation between firm investment ratios and institutional blockholders for
a sample of 6,300 publicly traded firms in 16 large emerging markets for the 2004–2016 period.
Results show that independent, long-term, and local institutional investors boost investment ratios,
which is consistent with the monitoring role and blockholder voice intervention hypotheses. The
presence of institutional blockholders, regardless of their monitoring involvement, reduces firm
cash flow sensitivity ratios and thus reduces firms’ financial constraints. Minority institutional
investors complement the positive effect of blockholders investors. However, the effect on
financial constraints decreases as the quality of the country's institutions increases.
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URI: https://repositorio.uchile.cl/handle/2250/152075
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Series Documentos de Trabajo No. 469, pp. 1 - 48, Septiembre, 2018
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