Cross-Country Determinants of Institutional Investors’ Investment Horizons

24 Pages Posted: 29 Jun 2020 Last revised: 28 Jun 2021

See all articles by Simon Döring

Simon Döring

University of Hamburg

Wolfgang Drobetz

University of Hamburg

Sadok El Ghoul

University of Alberta - Campus Saint-Jean

Omrane Guedhami

University of South Carolina - Moore School of Business

Henning Schröder

University of Hamburg - Hamburg Business School; Hamburg Financial Research Center

Date Written: June 5, 2020

Abstract

Using a large dataset of firms from 35 countries, we study the country-level determinants of institutional investors’ investment horizons around the world. We document 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.

Keywords: Institutional investors, investment horizons, churn rates, institutional environments

Suggested Citation

Döring, Simon and Drobetz, Wolfgang and El Ghoul, Sadok and Guedhami, Omrane and Schröder, Henning, Cross-Country Determinants of Institutional Investors’ Investment Horizons (June 5, 2020). Finance Research Letters, forthcoming, Available at SSRN: https://ssrn.com/abstract=3619693 or http://dx.doi.org/10.2139/ssrn.3619693

Simon Döring

University of Hamburg ( email )

Moorweidenstraße 18
Hamburg, 20148
Germany

Wolfgang Drobetz (Contact Author)

University of Hamburg ( email )

Moorweidenstrasse 18
Hamburg, 20148
Germany

Sadok El Ghoul

University of Alberta - Campus Saint-Jean ( email )

Edmonton, Alberta T6G 2R3
Canada
780-465-8725 (Phone)
780-465-8760 (Fax)

Omrane Guedhami

University of South Carolina - Moore School of Business ( email )

Columbia, SC
United States

Henning Schröder

University of Hamburg - Hamburg Business School ( email )

Moorweidenstr. 18
Hamburg, 20148
Germany

Hamburg Financial Research Center ( email )

c/o University of Hamburg
Moorweidenstr. 18
Hamburg, 20148
Germany

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