A contingency model of board characteristics and foreign institutional investor ownership: the moderating role of firm size and market valuation

Nair, smitha and Gil, Mathew Thomas (2020) A contingency model of board characteristics and foreign institutional investor ownership: the moderating role of firm size and market valuation. Cogent Economics and Finance. pp. 1-17. ISSN 23322039

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Abstract

Abstract: We investigate the governance sensitivity of foreign institutional investors’ (FII) ownership in a large emerging market setting of India, characterized by highly concentrated insider ownership. More specifically, we focus on the moderating role of firm size and price to book value (PB) in determining the relationship between FII ownership and board characteristics, such as board size, outside director ratio, CEO duality, and board meeting attendance. Our methodology emphasizes the importance of contextual analysis in studies relating to institutional investors’ preferences. We find that FIIs prefer bigger boards and greater board independence in larger and growth firms (higher PB). Further, FIIs prefer firms that have separate CEO and Chairman of the board positions in growth firms. Subjects: Economics; Finance; Business; Management and Accounting Keywords: foreign institutional investors; corporate governance; board characteristics; ownership concentration; emerging markets JEL Classification: G11; G23; G34

Item Type: Article
Uncontrolled Keywords: foreign institutional investors; corporate governance; board characteristics; ownership concentration; emerg
Subjects: Departments at MU > Commerce
Depositing User: department of Commerce
Date Deposited: 01 Jan 2021 05:29
Last Modified: 01 Jan 2021 05:29
URI: http://eprints.manipal.edu/id/eprint/156185

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