Institutional investors, risk/return and corporate governance : practical lessons from the Global Financial Crisis

Hutchinson, Marion R., Seamer, Michael, & Chapple, Larelle June (2012) Institutional investors, risk/return and corporate governance : practical lessons from the Global Financial Crisis. In Accounting & Finance Association of Australia New Zealand Conference (AFAANZ 2012), 1-3 July 2012, Melbourne, VIC.

Abstract

The global grown in institutional investors means that firms can no longer ignore their influence in capital markets. However, not all institutional investors have the same motives to influence the firms they invest in. Institution investors' ability to influence management depends on the size of their investment and whether they have any business relations with the firm. Using a sample of Australian firms from 2006 to 2008, our empirical results show that the proportion of a company's shares held by institutional investors is positively associated with firm governance ratings, risk and profitability. This study shows that a positive association between risk and return is associated with large active institutional ownership, which we interpret as shareholders with sufficient power to pressure management to increase short-term profits.

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ID Code: 78070
Item Type: Conference Paper
Refereed: Yes
Keywords: Institutional investors, Risk/Return , Corporate Governance, Global Financial Crisis
Subjects: Australian and New Zealand Standard Research Classification > COMMERCE MANAGEMENT TOURISM AND SERVICES (150000) > ACCOUNTING AUDITING AND ACCOUNTABILITY (150100)
Divisions: Current > QUT Faculties and Divisions > QUT Business School
Current > Schools > School of Accountancy
Copyright Owner: Copright 2012 the authors
Deposited On: 28 Oct 2014 00:34
Last Modified: 30 Oct 2014 04:52

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