Cross-country determinants of institutional investors’ investment horizons
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Cross-country determinants of institutional investors’ investment horizons. / Döring, Simon; Drobetz, Wolfgang; El Ghoul, Sadok et al.
In: Finance Research Letters, Vol. 39, 101641, 01.03.2021.Research output: Journal contributions › Journal articles › Research › peer-review
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TY - JOUR
T1 - Cross-country determinants of institutional investors’ investment horizons
AU - Döring, Simon
AU - Drobetz, Wolfgang
AU - El Ghoul, Sadok
AU - Guedhami, Omrane
AU - Schröder, Henning
N1 - Funding Information: We thank MSCI for sharing index constituents’ data. Publisher Copyright: © 2020 Elsevier Inc.
PY - 2021/3/1
Y1 - 2021/3/1
N2 - 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.
AB - 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.
KW - Churn rates
KW - Institutional environments
KW - Institutional investors
KW - Investment horizons
KW - Management studies
UR - http://www.scopus.com/inward/record.url?scp=85086573262&partnerID=8YFLogxK
U2 - 10.1016/j.frl.2020.101641
DO - 10.1016/j.frl.2020.101641
M3 - Journal articles
AN - SCOPUS:85086573262
VL - 39
JO - Finance Research Letters
JF - Finance Research Letters
SN - 1544-6123
M1 - 101641
ER -