Institutional Ownership and Firms’ Thrust to Compete

34 Pages Posted: 12 Feb 2018 Last revised: 15 Apr 2019

See all articles by Panayiotis C. Andreou

Panayiotis C. Andreou

Cyprus University of Technology

Franco Fiordelisi

University of Rome III - Department of Business Studies; Middlesex University - Business School

Terry Harris

Durham University Business School

Dennis Philip

Durham University - Department of Economics and Finance

Date Written: April 14, 2019

Abstract

A firm’s thrust to compete, as an attribute of corporate culture, captures the relative importance of corporate values that propel a firm to achieve superior financial performance by emphasizing organizational effectiveness, fast response to external information, and enhanced competitiveness. Using this attribute of corporate culture, this study provides causal evidence that institutional investors’ preferences significantly affect firms’ thrust to compete. In particular, the results show that transient institutional ownership intensifies, while dedicated institutional ownership diminishes, a firm’s thrust to compete. These findings inform the recent literature that considers the behind‐the‐scenes intervention from institutional investors relating to the corporate governance and organizational climate. Further, our inferences have policy implications, since they identify thrust to compete as a channel through which institutional investors intervene to affect firms’ operating philosophy and decision-making.

Keywords: Thrust to compete; Corporate culture; Institutional ownership; Transient investors; Dedicated investors

JEL Classification: G20, G32, G34, G38, M48

Suggested Citation

Andreou, Panayiotis C. and Fiordelisi, Franco and Harris, Terry and Philip, Dennis, Institutional Ownership and Firms’ Thrust to Compete (April 14, 2019). Available at SSRN: https://ssrn.com/abstract=3120677 or http://dx.doi.org/10.2139/ssrn.3120677

Panayiotis C. Andreou (Contact Author)

Cyprus University of Technology ( email )

School Of Management and Economics
P.O. Box 50329
Lemesos, 3036
Cyprus

HOME PAGE: http://www.pandreou.com

Franco Fiordelisi

University of Rome III - Department of Business Studies ( email )

Via Silvio D'Amico 77
Via Silvio D'Amico 77
Rome, RM 00145
Italy

HOME PAGE: http://host.uniroma3.it/docenti/fiordelisi/?home

Middlesex University - Business School ( email )

The Burroughs
London, NW4 4BT
United Kingdom

Terry Harris

Durham University Business School ( email )

Mill Hill Lane
Durham, Durham DH1 3LB
United Kingdom

Dennis Philip

Durham University - Department of Economics and Finance ( email )

Department of Economics and Finance
Mill Hill Lane
Durham, DH1 3LB
United Kingdom

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