We analyse the combined effects of bargaining power, managerial ability/effort, and risk-taking strategies on the choice of hedge fund (HF) incentive contracts, and hedge fund performance. In our model, the HF manager and outside investors first negotiate over the type of contract (asymmetric or...

Using a new measure of shareholder inattention based on exogenous industry shocks to institutional investor portfolios, we document a positive and significant relation between firms with distracted institutional shareholders and the cost of debt financing. This effect is stronger for firms with...

Among the 41 items from five corporate social responsibility dimensions: community, diversity, employee relations, environment, and human rights, we examine which corporate social deeds influence institutional investors' motivated equity ownership most in the U.S. We find that enforcing...

We argue that the corporate governance of emerging economy IPO firms is influenced by firm-specific institutionally embedded block ownership groups. Applying an extended institutional logic perspective and using a mixed-effects ordered probit model, our findings from 190 IPO-firms from 22...

This paper examines the valuation effects associated with the incentive structures of different types of institutional investors using the ownership levels of public and private pension funds in a firm. The results suggest that institutional monitoring is associated with valuation effects when...

Upon the revelation of corporate misconduct by firms in their portfolios, institutional investors experience a significant discount in the market value of their portfolios, creating a negative externality that averages $92.7 billion of losses per year. This negative spillover increases with...

This study addresses the debate over the relation between institutional ownership and dividend payout through the lens of the agency theory. We hypothesize that only institutional investors with certain traits are likely to monitor and conditioning on firms' financial performance, they will use...

We document peer effect as an important factor in determining corporate voluntary disclosure policies. Our identification strategy relies on a discontinuity in the distribution of institutional ownership caused by the annual Russell 1000/2000 index reconstitution. Around the threshold of the...

Ease of coordination can enable diffuse shareholders to play a more effective role in corporate governance and thereby increase firm value. Using geographical proximity and correlation in portfolio allocation decisions as proxies for the ease of coordination, I find evidence that ease of...