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Institutional Ownership Stability and Post-Merger Performance

Author

Listed:
  • Lin Lin

    (National Chi Nan University)

Abstract

Early paper argues that only independent long-term institutions are active monitors in the decision-making process of their investee firms. Using a sample of U.S. bids during1984-2011, this study finds that there is a significantly positive effect of institutionalownership stability on post-merger buy-and-hold returns (BHAR) and industry-adjustedreturns on assets (ROA) no matter whether they have concentrated holdings or not. Further, some institutions under public scrutiny (public pension funds, banks, and insurance companies in this study) seem to be more active in monitoring the post-merger performance than others. Empirical evidence also supports the relationship of institutional ownership stability and merger completion likelihood.

Suggested Citation

  • Lin Lin, 2016. "Institutional Ownership Stability and Post-Merger Performance," Proceedings of International Academic Conferences 4006543, International Institute of Social and Economic Sciences.
    • Handle: RePEc:sek:iacpro:4006543
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    File URL: https://iises.net/proceedings/24th-international-academic-conference-barcelona/table-of-content/detail?cid=40&iid=056&rid=6543
    File Function: First version, 2016
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    More about this item

    Keywords

    Institutional ownership stability; Mergers and acquisitions; Institutional investors; Monitoring; Corporate governance;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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