Motivated monitors: The importance of institutional investors' portfolio weights

• 成果类型: Article
• 署名作者: Fich, Eliezer M.; Harford, Jarrad; Tran, Anh L.
• 署名单位: Drexel University; University of Washington; University of Washington Seattle; City St Georges, University of London
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2015.06.014
• 发表日期: 2015
• 页码: 21-48
• 关键词: Monitoring; institutional investors; Mergers and Acquisitions; Takeover premiums

摘要

Studies of institutional monitoring focus on the fraction of the firm held by institutions. We focus on the fraction of the institution's portfolio represented by the firm. In the context of acquisitions, we hypothesize that institutional monitoring will be greatest when the target firm represents a significant allocation of funds in the institution's portfolio. We show that this measure is important in reconciling mixed findings for total institutional ownership in the prior literature. The results indicate that our measure of institutional holdings leads to greater bid completion rates, higher premiums, and lower acquirer returns. This empirical evidence provides support for theories predicting a beneficial effect of blockholders in monitoring the firm in general and in enhancing the gains to takeover targets in particular. (C) 2015 Elsevier B.V. All rights reserved.