July'23
The IUP Journal of Corporate Governance
Institutional Investors' Heterogeneity and Firm Performance: Evidence from Emerging Economies
The study assesses the impact of institutional investor heterogeneity on firm performance in emerging economies. The sample consists of a panel dataset of 219 firms listed on the major stock exchanges of five leading emerging economies in the world (Brazil, Russia, India, China, and South Africa-BRICS). The findings reveal that institutional investors significantly influence the performance of firms in BRICS countries. Based on stake size, large institutional investors are positively related to firm performance, whereas small investors negatively impact firm performance. On the other hand, based on the business relationship with the investee firm, pressure-sensitive investors negatively impact firm performance, whereas pressure-insensitive investors are only weakly related to firm performance. Further, another category of activist pressure-insensitive institutional investors is strongly associated with firm performance. In light of limited studies in emerging economies, the study's findings seek to provide new and original empirical evidence on the monitoring role of institutional investors in emerging economies.
Exploring the Nexus Between Ownership Patterns and Corporate Performance in India
The paper investigates whether there is evidence to support the concept that variations in observed ownership structures across firms result in methodical variations in observed financial performance in the Indian market. The study assesses the impact of ownership structure on corporate performance measured by both the market-based measures (Tobin's Q, MBVR and MVA) and accounting-based measures (ROA, ROCE and ROE) of 178 NSE CNX listed nonfinancial companies for a period of 8 years from 2011 to 2018. Two different aspects of ownership structure are considered, i.e., concentration and owner identity. The results of the study could help the Indian companies, regulators, policymakers, and practitioners to adopt and sustain good corporate governance practices for value creation and for making them ready to meet the future changes.
Market Reaction to Appointment of Women on the Board of Directors: An Event Study on Indian Companies
The study examines the stock market reaction to the appointment of women to the Board of Directors of companies in India. The sample comprises 68 such appointments by 68 companies from 2014 to 2021. Standard event study methodology was used to determine the market reaction to the appointment of women directors. The event study used a 41-day event window (20 days prior to the date of appointment and 20 days post appointment) and an estimation period of 180 days. The study found evidence of a positive, statistically significant return post announcement, which suggests that the Indian stock market reacts favorably to the appointment of female directors. The findings have implications for policymakers that support gender diversity.
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