TY - JOUR

T1 - Institutional ownership and firm performance in the global shipping industry

AU - Drobetz, Wolfgang

AU - Ehlert, Sebastian

AU - Schröder, Henning

N1 - Funding Information: The authors are grateful for financial support from the Maritime Economics Research Center (MERC) at Hamburg Business School. We thank three anonymous referees, Simon Döring, Manolis Kavussanos (guest editor), Tizian Otto, and Ignacio Requejo for valuable comments. Publisher Copyright: © 2020 Elsevier Ltd

PY - 2021/2/1

Y1 - 2021/2/1

N2 - We examine the effect of institutional investors on the valuation of listed shipping firms. Institutional investors have a positive influence on the market value of shipping firms, confirming that institutional ownership is a “universal” corporate governance mechanism. This valuation effect is more pronounced in firms dominated by institutional investors with a short-term investment horizon. It is also stronger in firms with high stock liquidity, suggesting that short-term investors, through the threat of exit, are able to mitigate agency conflicts and improve corporate governance. Investment regressions indicate that shipping firms with a larger fraction of short-term investors are better able to exploit growth opportunities.

AB - We examine the effect of institutional investors on the valuation of listed shipping firms. Institutional investors have a positive influence on the market value of shipping firms, confirming that institutional ownership is a “universal” corporate governance mechanism. This valuation effect is more pronounced in firms dominated by institutional investors with a short-term investment horizon. It is also stronger in firms with high stock liquidity, suggesting that short-term investors, through the threat of exit, are able to mitigate agency conflicts and improve corporate governance. Investment regressions indicate that shipping firms with a larger fraction of short-term investors are better able to exploit growth opportunities.

KW - Corporate governance

KW - Firm value

KW - Institutional investor

KW - Investment horizon

KW - Shipping industry

KW - Management studies

UR - http://www.scopus.com/inward/record.url?scp=85098942611&partnerID=8YFLogxK

U2 - 10.1016/j.tre.2020.102152

DO - 10.1016/j.tre.2020.102152

M3 - Journal articles

AN - SCOPUS:85098942611

VL - 146

JO - Transportation Research Part E: Logistics and Transportation Review

JF - Transportation Research Part E: Logistics and Transportation Review

SN - 1366-5545

M1 - 102152

ER -