We examine the impact of geographic concentration of institutional investors on corporate governance and firm value. We find that firms whose large institutions, particularly nontransient institutions, are closely located to each other experience higher forced CEO turnover-performance sensitivity, more frequent proxy voting against management, higher returns around CEO turnover announcements and Schedule 13D filings, larger increases in Tobin’s q (ROA), and greater liquidity. These results are robust to using the introduction of new airline routes as a natural experiment and to using an instrumental variable approach. Our results suggest that geographic concentration of investors increases monitoring effectiveness.
JEL Classification: G14, G23, G34
Keywords: Geographic concentration, Corporate governance, Monitoring, Institutional investors, Firm value, CEO turnover, Proxy voting
학회소식
[2015년 제 4차] Geographic Concentration of Institutions, Corporate
작성자 : 관리자
조회수 : 926
게시일 :
2016-01-08
