...Institutional holding and market friction Ping-Wen Sun Louisiana State University psun1@lsu.edu Abstract This study investigates the relationship between the institutional holding and the stock’s market friction measure. According to Sun’s (2007) findings, I use Hou and Moskowitz’s (2005) price delay measure (D1) and Liu’s (2006) liquidity measure (LM12) to proxy for a stock’s market friction. I find that a higher total institutional holding tends to decrease a stock’s price delay measure, but institutional holding exhibits a U-shaped relationship with a stock’s LM12 measure. However, as the number of institutions increases, the stock’s market friction decreases. In terms of different types of institutional holdings, higher total block holding or higher top five institutional holding of a stock increases a stock’s market friction level. Furthermore, in contrast to Agarwal’s (2007) findings, higher independent long term institutional holding and risk averse institutional holding tends to decrease a stock’s market friction level. Institutional holding and market friction Abstract This study investigates the relationship between the institutional holding and the stock’s market friction measure. According to Sun’s (2007) findings, I use Hou and Moskowitz’s (2005) price delay measure (D1) and Liu’s (2006) liquidity measure (LM12) to proxy for a stock’s market friction. I find that a higher total institutional holding tends to decrease a stock’s price delay measure, but institutional...
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...distinction as the largest bankruptcy filing in U.S. history. The events surrounding this history-making occurrence provide an important opportunity to examine the repercussions for WorldCom’s stakeholders. We especially focus on the valuation effects of the WorldCom failure on exposed financial institutions for their important monitoring roles as institutional investors and creditors. Despite the heightened uncertainty facing investors during this period, we find that the market is remarkably efficient in distinguishing among the various types of stakeholders. In particular, institutional investors and creditors are largely unaffected by the events, which is expected based on the benefit of diversification. In contrast, large and key competitors are adversely affected by the events, which may be attributed to scrutiny of rivals that are perceived to be facing similar problems. Furthermore, for large and key competitors, these results indicate that contagion effects dominate competitive effects. © 2004 Published by Board of Trustees of the University of Illinois. JEL classification: G33; G14 Keywords: WorldCom; Bankruptcy; Contagion; Institutional investors; Creditors;...
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...Introduction Institutional investors have become predominant players in the stock market, and their influence has been growing steadily in recent times. Due to their large shareholdings it is perceived that institutional investors can leverage their position and act as watchdogs against corporate abuse. There are however several practical considerations which serve as disincentives to shareholder activism. The assertion that institutional investors have the potential and the incentive to contribute towards improving the corporate governance regime of their respective portfolio companies is a contentious issue. Some commentators on this subject have made a positive assessment of shareholder activism but empirical findings give a checkered history of the efficacy of such institutional investor activism thereby casting a shadow of doubt on the role of institutional investors in corporate governance. The analysis of divergent theories on the incentives and disincentives governing the behaviour of institutional investors in this regard becomes pertinent. The questions that are sought to be addressed in this paper are as follows - a. What are the various incentives and disincentives to shareholder activism among institutional investors? b. What are the techniques which may be employed by institutional investors to monitor the companies in which they invest? c. What are the reasons behind shareholder passivity? Is this apathy rational in the context of institutional shareholders...
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...(Management Sciences), Bahria University Islamabad, Pakistan Email: Rashidzamantanoli@gmail.com Abstract The current study explores the impact of ownership structure on capital structure in textile sector and rest of the manufacturing sectors (non-textile) in Pakistan using regression analysis with fixed effect model. As textile sector is the largest manufacturing sector in Pakistan and having diversified financial characteristics, however, there exists a gap whether textile sector’s ownership and capital structure relationship matches with other manufacturing sectors or not. Current study tries to fill this gap. The results indicate that in textile sector, no significant relationship exists between ownership concentration and capital structure whereas a significant negative relationship is found between these two variables in case of non-textile firms in Pakistan. However, institutional ownership variable was found to be non-significant in both textile and non-textile sectors. Other control variables were found to have the results as hypothesized. Period of study used in this study is 2006-2009 and sample comprises of KSE listed firms. Keywords: Ownership concentration, capital structure, institutional shareholding. INTRODUCTION The capital structure refers to the optimal mix of debt and equity financing structure used by a firm to support its financing needs. Literature supports the notion that an optimal capital structure can have a positive...
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...dominant driver. Acknowledging the importance of momentum, the current study explores whether and how REIT return patterns are linked to the underlying characteristics of the REITs themselves, in the manner of Daniel and Titman’s (Journal of Finance 52(1):1–33, 1997, Journal of Portfolio Management 24(4):24–33, 1998) characteristics model. Over the period 1993 through 2009, we find that after controlling for momentum, book-tomarket, institutional ownership, and illiquidity are all strongly associated with REIT returns while size and analyst coverage are not. We further extend prior research by examining the influence of changes in interest rate cycles on REIT returns, and find that the characteristic-return relationships are heavily influenced by interest rates. Keywords Real Estate Investment Trusts (REIT) . Return momentum . Characteristics models . Factor models . Monetary policy Introduction REITs as an asset class have become an increasingly important part of well diversified portfolios for both individual and institutional investors. Although REITs are very different from non-REIT equities in many ways, it has been shown that REIT and non-REIT equity returns have striking similarities. For example, both Chui et al. P. R. Goebel (*) : D. M. Harrison : J. M. Mercer Rawls College of Business, Texas Tech University, Lubbock, TX 79409-2101, USA e-mail: paul.goebel@ttu.edu D. M. Harrison e-mail: david.m.harrison@ttu.edu J. M....
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...individual to invest as well as institutional investors. Prior to development in capital markets, individual investors used to make their own investment decisions. But all these are changed now as individual investors have been replaced by institutional investors. This is also known as shareholding. Institutional investors play a very enviable role in corporate governance since the primary responsibility lies in side the board room, with the top management not with people and system imposed from outside. Looking at Board of Directors and investors, investors are seen as “sources of finance” or “partners in the enterprise”. This means that shareholders are seen as faceless, financial resource whose trust may be limited and need for checks and balances real? Or are they part of the business? Companies do take advice and guidance from their institutional shareholder in domestic and foreign business growth decisions (Stuffman 2008). This takes us to Hermes Fund Management, an institutional investment Corporation, which plays a strategic role in the activities of Total and Premier Oil. Total and Premier Oil has sought assistance from Hermes in managing business concern in Burma. This case study will show how trusted are Directors bearing in mind the interest or the shareholders. Shareholders are in turn given consideration and the respect for their membership in merit. Institutional Investors and Corporate Social Responsibility: As earlier stated, institutional investors are organizations...
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...Impacts of Racism in Hockey............................................................................8 Influencing Factors...........................................................................................8 Corrective Action.............................................................................................10 Conclusion........................................................................................................12 ------------------------------------------------- INTRODUCTION Canada’s favourite past time hockey has and continues to endure racism throughout all levels of the sport. This paper will expose the institutional racism in Canadian hockey associations with an emphasis on black hockey players. Drawing credible news reports and personally experiences, I will provide evidence that institutional racism is deeply rooted within the fabric of the sport, which can be observed from the actions and behaviour of authoritative figures. Additionally, the essay will analyze the implications from racial discrimination in both minor and professional hockey. By doing so, valuable information will be discovered to understand the true underlying factors that are influence and permit racist behaviour to persist. Moreover, the key purpose...
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...Ownership and Disclosure A Review of Literature By BADRU Bazeet and Mousa Sharaf Adin Hezam Abstract This is a review of various literatures on ownership and disclosure which has been carried out by various researchers in different countries. So far majorities of the researchers shows that the extent of corporate disclosure is negatively associated with a higher management of ownership structure and the extent of corporate voluntary disclosures is positively related with a higher institutional ownership structure. But findings also show that the negative relationship is weaker if the firm has a higher proportion of independent non- executive directors. Introduction Ownership Structure is a mechanism that aligns the interest of Shareholders and Managers. Corporate governace is the capstone of the activities that can reduce agency costs. Corporate mangers disclosure policies are influenced by firm’s ownership and governance on the level of various types of information disclosure. This is a summary of literature review on ownership structure and corporate disclosure. Studies have shown that ownership structure can be state, legal, managerial and block holder depending on the countries and cultural environment. Blockholder ownership is the percentage of shares held by substancial shareholders( that is shareholdings of 5% or more). Jensen and Meckling (1976) argue that substancial shareholders are expected to have both greater power and incentives to monitor management, as...
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...Institutional investors are important in today’s business world because they have such a great influence on the cash flow surrounding all businesses. In a quick example to explain their importance, consider your 401k plan. I would much rather have my money trusted with an institutional investor than an individual investor, or worse, myself. That is a disaster waiting to happen. Institutional investors do this all day, every day. There is always hype from certain people concerning this profession, but I believe it’s mostly due to their lack of knowledge in the manner. It’s not fair to criticize something that you don’t completely understand. Institutional investors hold a high advantage when it comes to moving around the architecture of corporate policy. Reason being is because they hold a high ownership of stock (Varma, 2001). Owning this high amount of stock gives them the upper hand. They are capable of voting power, and much more. They also hold somewhat of a position of superiority when it comes to attaining information. This is an additional way that they are of great importance to the business world. They are able to actively oversee and supervise a company’s managers (Varma, 2001). I almost like to view this as a discreet check and balance process for firms. Lastly, one of the most important aspects of the institutional investor’s position is to ensure good business ethics. This brings back the comment I made earlier about the checks and balances process. Institutional...
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...Thomas Lovsey Mrs. Barker ENGL 1100 Nov. 12, 2015 Not as Simple as Black-and-White “Discrimination is behavior, intentional or not, which negatively treats a person or a group of people based on their racial origins” (Randall). It is unclear what the exact cause is for people to be prejudiced towards another group of individuals. Racism could perhaps be triggered by having a fear of people who are different, needing to fit in with others who are of a racist mindset, and/or being ignorant of other people’s cultures. In the 1998 movie Pleasantville, it is shown that racism and discrimination towards different people occurs because of sudden changes to an established system and society. In reality, racism is a result of generations of stereotypes and mistreatment of a certain group of people, and is not something that can be resolved as quickly as it is in the movie. The film Pleasantville, directed by Gary Ross, is the story of how two teens from the 1990’s, David and Jennifer, end up in a 1950’s sitcom called Pleasantville. Everything is black-and-white in this world, and all the citizens believe it is perfect, or pleasant. As David and Jennifer (now called Bud and Mary-Sue) stay in Pleasantville, they quickly change the conventional norms of the society, bringing new and different ideas to the people. This change is shown when some of the citizens change from black-and-white to full color. As the changes to many citizens’ color and behaviors keep occurring, a group of black-and-white...
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...Hermes Fund Management Dr. Okan Geray 1. Is the role of institutional investors to influence the strategy of companies in which they invest? Yes, they are influence on the strategy for the company * Institutional investors are in a unique position to exercise influence over companies and to hold them accountable for good governance. Given the typically significant stake they hold, they have the ability to demand meetings with the senior management of companies, challenge them on issues of concern, discuss strategies for achieving the companies’ goals and objectives and be the leading voice of shareholders in demanding corrective action when wrongdoing occurs. * Thus institutional investors have a critical and proactive role to play in the governance of companies. They have better access to information and possess the resources to build the necessary monitoring Capabilities. Given their unique position of influence, there is a need to priorities their leadership role in governance. * Institutional investors are professional investors who act on behalf of beneficiaries, such as individual Savers or pension fund members, the categories of institutional investors are wide and can include Collective investment vehicles, which pool the savings of many, and licensed fund managers to whom these funds are allocated. * Hermes is a UK independent fund manager investing approximately £36 billion on behalf of over 100 clients, including pension funds, insurance...
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...About Digital Libraries Library users increasingly expect everything to be immediately available on the web, free of charge at each point of service and coupled with the assurance of permanent access. At a cross-cultural level, libraries, museums and archives work together to a growing extend, to make their digital collections and objects available on the web for a large audience, very often through one central access point, a so called portal or digital library. IFLA recognizes the current shift of many libraries from analogue to digital, and increasingly includes digital libraries in its strategic agenda. This focus will be achieved not only by looking at the digitisation process as such, but also at strategies for providing long term access to digital content. At the IFLA World Library and Information Congress in Milan in 2009, the IFLA Professional Committee together with the Italian government organized a one-day conference on digital libraries which focused on the user perspective and the way in which cultural heritage institutions and publishers respond to the digital shift in the library world. As a result of this conference the IFLA Professional Committee drew up a vision statement for IFLA to form the basis to position and connect digital libraries related activities within the IFLA organisation. This vision is formulated as follows: To employ the fullest potential of digital technology in partnership with users by enabling seamless and open access to all types...
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...JISC DEVELOPMENT PROGRAMMES ‘Electronic Theses’ FAIR Project Final Report Project |Project Acronym | |Project ID | | |Project Title |‘Electronic Theses’ | |Start Date |1st July 2002 |End Date |30th September 2004 | |Lead Institution |The Robert Gordon University | |Project Director |Dr. Susan Copeland | |Project Manager & contact details |Dr. Susan Copeland | | | | | |The Robert Gordon University | | |The Georgina Scott Sutherland Library | | |Garthdee Road | |...
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...DISSERTATION PROPOSAL The Impact of Foreign Share Ownership on Financial Performance in Australia Word Count: 2,696 Table of Contents 1. Introduction ........................................................................................................................ 3 2. Literature Review ............................................................................................................... 5 2.1 2.2 3. 4. Corporate Governance in Australia ............................................................................. 5 Ownership Structure and Financial Performance........................................................ 6 Hypothesis .......................................................................................................................... 8 Methodology....................................................................................................................... 8 4.1 4.2 Model Design .............................................................................................................. 9 Sample ....................................................................................................................... 10 5. 6. References ........................................................................................................................ 11 Appendix .......................................................................................................................... 14 6.1 6.2 Structure .................
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...Corporate Governance SCGOP Contents Foreword 3 1 The mission of the Foundation for Corporate Governance Research for Pension Funds and the purpose of this manual 5 2 Corporate governance in practice in the Netherlands 7 3 Basic principles of corporate governance 11 4 Corporate governance and performance 14 5 Institutional investors and corporate governance 16 6 Formulation of a voting policy 19 7 2 The exercise of voting rights 23 8 Reporting on the implementation of the voting policy and voting behaviour 26 9 Pension fund governance 27 10 Socially responsible investing 28 11 About SCGOP 30 Appendix: Recommendations on Executive Remuneration 32 Foreword Pension funds strive to protect the benefits of their members as effectively as possible from the consequences of inflation. They therefore invest part of their assets in shares. But the accounting scandals over the past few years have severely damaged investors’ confidence in shares. Rebuilding this trust is now a high priority everywhere. Pension funds and other institutional investors are expected to contribute to this rebuilding process. In the Dutch Corporate Governance Code presented by the Tabaksblat Committee on 9 December 2003, the role of the shareholders is described as follows: "The general meeting of shareholders should be able to exert such influence on the policy of the executive board and the supervisory...
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