Cross-country determinants of institutional investors’ investment horizons

Research output: Journal contributionsJournal articlesResearchpeer-review


Using a large dataset of firms from 35 countries, we study the country-level determinants of institutional investors’ investment horizons. We show that an equity investor-friendly institutional environment is more important for long-term investors, while short-term investors seem to be less concerned about the quality of the financial and legal environment. Beyond the financial and legal structure, the cultural environment and economic policy uncertainty in a country are other important determinants of investor horizons. These findings improve our understanding of cross-country differences in the corporate governance role, i.e., engagement vs. exit, of institutional investors.

Original languageEnglish
Article number101641
JournalFinance Research Letters
Publication statusPublished - 01.03.2021
Externally publishedYes

Bibliographical note

Funding Information:
We thank MSCI for sharing index constituents’ data.

Publisher Copyright:
© 2020 Elsevier Inc.

    Research areas

  • Churn rates, Institutional environments, Institutional investors, Investment horizons
  • Management studies