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The impact of institutional investors on firms' performance in the context of financialization
Author(s) -
Alexiou Constantinos,
Mohamed Abdulkadir,
Nellis Joe
Publication year - 2021
Publication title -
international journal of finance and economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.505
H-Index - 39
eISSN - 1099-1158
pISSN - 1076-9307
DOI - 10.1002/ijfe.1790
Subject(s) - financialization , economics , context (archaeology) , portfolio , institutional investor , granger causality , financial economics , monetary economics , econometrics , corporate governance , finance , geography , archaeology
This paper investigates the impact of U.K. institutional holdings on the financialization process. Using panel data analysis, we find that their holdings have a positive impact on the financialization. Investigating the source of this impact, we find that their portfolio companies outperform their peers matched by industry and size. Together, these findings suggest that institutional investors add value to the capital market and play an instrumental role in shaping the financialization process. Granger's causality test reveals that institutional holdings Granger cause financialization process, and the relationship is one‐way direction.