Which Institutional Investors Monitor? Evidence from Acquisition Activity

Qiu, Lily Xiaoli

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Which Institutional Investors Monitor? Evidence from Acquisition Activity

Brown Economics Working Paper Series No. 2004-21

Yale ICF Working Paper No. 04-15

50 Pages Posted: 6 Apr 2004

See all articles by Lily Xiaoli Qiu

Lily Xiaoli Qiu

Brown University - Department of Economics

Date Written: June 2006

Abstract

This paper shows that the presence of large public pension fund shareholders particularly reduces acquisitions by cash-rich and low-q firms, and by firms seeking to ``buy growth'', after controlling for ownership endogeneity, firm-level governance structure, and other firm characteristics. When firms with large public pension fund presence do acquire other firms, they perform relatively better in the long-run. Other institutional investors have either the opposite effect or no effect.

Keywords: Corporate Governance, Mergers and Acquisitions, Institutional Investors

JEL Classification: G2, G34

Suggested Citation: Suggested Citation

Qiu, Lily Xiaoli, Which Institutional Investors Monitor? Evidence from Acquisition Activity (June 2006). Brown Economics Working Paper Series No. 2004-21, Yale ICF Working Paper No. 04-15, Available at SSRN: https://ssrn.com/abstract=521803