Institutional Block-Holdings of UK Firms: Do Corporate Governance Mechanisms Matter?
University of Manchester - Manchester Business School, Division of Accounting Finance
Steve W. J. Lin
Florida International University (FIU) - School of Accounting
University of Manchester
December 7, 2009
Using a sample of UK firms we find that institutional block-holding is negatively associated with directors’ ownership and is positively associated with board composition, suggesting that institutional block-holders regard directors’ ownership and board composition as substitute and complementary control mechanisms, respectively. We also show that UK institutional block-holders prefer smaller firms and firms with a shorter listing history. The presence of institutional block-holders is associated with smaller boards and lower trading liquidity. Finally, our results indicate that the investment preference of UK institutional block-holders varies with the level of their shareholding.
Number of Pages in PDF File: 36
Keywords: institutional ownership, directors’ ownership, board structure, corporate governance
JEL Classification: G3, H39working papers series
Date posted: February 23, 2007 ; Last revised: December 20, 2009
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