Institutional ownership, capital structure, and firm performance

In most studies of ownership and firm performance, researchers have assumed different forms of ownership do not interact in their effect on firm strategy or performance. Focusing on the role of institutional owners, this study poses two related questions: (1) What are the relationships between outsi...

Full description

Saved in:
Bibliographic Details
Published in:Strategic management journal 1991-10, Vol.12 (7), p.479-491
Main Authors: Chaganti, Rajeswararao, Damanpour, Fariborz
Format: Article
Language:English
Subjects:
Applied sciences
Business executives
Business ownership
Business structures
Capital structure
Computer science
control theory
systems
Corporate strategies
Corporations
Effects
Exact sciences and technology
executive stockholding
family stockholding
Financial management
firm performance
insider-institutional stockholding
Institutional ownership
Investment management companies
Investment strategies
Investors
Software
Stock ownership
Stockholders
Strategic planning
Studies
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:In most studies of ownership and firm performance, researchers have assumed different forms of ownership do not interact in their effect on firm strategy or performance. Focusing on the role of institutional owners, this study poses two related questions: (1) What are the relationships between outside institutional shareholdings, on the one hand, and a firm's capital structure and performance, on the other? and; (2) Does the size of stockholdings by corporate executives, family owners, and insider-institutions modify those relationships? The data, collected from 40 pairs of manufacturing firms selected from as many industries over a 3-year period, shows that the size of outside institutional stockholdings has a significant effect on the firm's capital structure. We have also found that family and inside institutional owners' shareholdings moderate the relationship between outside institutional shareholdings and capital structure. Likewise, corporate executives' shareholdings supplement the relationship between outside institutional shareholdings and firms' performance. These findings suggest that internal and external coalitions interact with each other to influence the firm's conduct.
ISSN:0143-2095
1097-0266
DOI:10.1002/smj.4250120702