Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
9719612 | Scandinavian Journal of Management | 2005 | 35 Pages |
Abstract
The purpose of this paper is to investigate the way institutional investors use information for equity-investment purposes, and to discuss the implications that this may have for the role of these investors as owners of public companies. On the basis of an empirical study, the paper reports that institutional investors tend to use very little of the available information regarding listed companies, and to simplify their forming of expectations. They managed this by setting a priori limitations on the investment alternatives, by relying on highly trusted external advisors, and by overemphasising the quarterly updating of the spreadsheet model. It is argued in the paper that if institutional investors are assigned a leading role in corporate governance, their heavy dependence on external advisors and their over-emphasis on quarterly financial information, may have negative implications for the management of listed companies.
Keywords
Related Topics
Social Sciences and Humanities
Business, Management and Accounting
Strategy and Management
Authors
Niclas Hellman,