Institutional ownership and firm performance: Evidence from an emerging economy

Using the Ordinary Least Square (OLS) estimation technique based on a sample of 180 listed firms from 2008 to 2018, this study investigates the impact of institutional ownership on firm performance in the Bangladeshi setting. Consistent with the "active monitoring" view, the results indica...

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Bibliographic Details
Published in:Journal of risk and financial management 2022-12, Vol.15 (12), p.1-17
Main Authors: Abedin, Syeda Humayra, Haque, Humaira, Shahjahan, Tanjina, Kabir, Md. Nurul
Format: Article
Language:English
Subjects:
Accounting
board independence
board ownership
Corporate governance
domestic ownership
Economic growth
Emerging markets
foreign ownership
Growth rate
Institutional investments
institutional ownership
ROA
Stock exchanges
Stockholders
Tobin's Q
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Summary:Using the Ordinary Least Square (OLS) estimation technique based on a sample of 180 listed firms from 2008 to 2018, this study investigates the impact of institutional ownership on firm performance in the Bangladeshi setting. Consistent with the "active monitoring" view, the results indicate that both domestic and foreign institutional investors have a positive effect on firm performance measured by Tobin's Q and Return on Asset (ROA). In addition, this study explores whether the other corporate governance attributes-board size and board independence-operate as mediators between institutional ownership and firm performance. Our findings indicate that both board size and board independence have a significant positive impact on the relationship between institutional ownership and firm performance.
ISSN:1911-8074
1911-8066
1911-8074
DOI:10.3390/jrfm15120567