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Institutional Investment and Internationalization: Ownership and Board Characteristics as Moderators

Author

Listed:
  • Vidya Sukumara Panicker

    (Indian Institute of Management Kozhikode)

  • Sumit Mitra

    (Indian Institute of Management Kozhikode)

  • Rajesh Srinivas Upadhyayula

    (Indian Institute of Management Kozhikode)

Abstract

Even while studies have explored the influence of institutional investors on strategic decisions of a firm, the interaction between a firm’s ownership and board has not been sufficiently explored in the literature. We argue that owing to the unique institutional context of an emerging economy, corporate governance characteristics of a firm such as promoter ownership and board characteristics would influence the interest of institutional investors on strategic decisions of a firm. We employ a large sample study to evaluate the influence of institutional investors on a single firm strategy- internationalization. We find that promoter ownership and the presence of an institutional nominee member on board of directors positively moderate the relation between institutional investors and internationalization whereas board independence is insignificant as a moderator. Our findings emphasize the influence of ownership and certain board characteristics on the preferences of institutional investors.

Suggested Citation

  • Vidya Sukumara Panicker & Sumit Mitra & Rajesh Srinivas Upadhyayula, 2016. "Institutional Investment and Internationalization: Ownership and Board Characteristics as Moderators," Working papers 209, Indian Institute of Management Kozhikode.
    • Handle: RePEc:iik:wpaper:209
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    Keywords

    promoter ownership; board nominee; board independence; institutional investors; internationalization;
    All these keywords.

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