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Institutional ownership and returns on investment

PublikationArtikel (med peer review)
Ägarskap, Bolagsstyrning, Corporate governance, Daniel Wiberg, Företagandets villkor, Johan Eklund, Marginal q, Per-Olof Bjuggren, Performance, Tobin’s q

Sammanfattning

This paper examines how institutional investors influence investment decisions and returns on investment. To measure investment performance, we use marginal q, which measures the ratio of the return on investment to the cost of capital. Institutional owners are found to have a positive but marginally diminishing effect on performance. Our paper uses longitudinal data on Swedish firms from 1999 to 2005; during this period, the ownership structure of Swedish firms underwent dramatic changes as institutional investors increased their ownership shares, while ownership by Swedish households decreased. However, controlling owners – who were often founding families – maintained their control of firms by resorting to extensive use of dual-class shares. This was an important determinant of firm performance that eradicated the positive influence of institutional ownership.
Related content: Working Paper No. 208

Bjuggren, P.-O., Eklund, J,. & Wiberg, D. (2016). Institutional ownership and returns on investment. Corporate Ownership and Control, 13(4), 419-430.


Liknande innehåll

The role of innovation metrics in innovation systems
Artikel (med peer review)Publikation
Öberg, C.
Publiceringsår

2020

Sammanfattning

In innovation systems, venture firms, incubators and science parks may interact with universities to achieve commercialisable output. These various parties are connected to different guiding performance metrics — measures on each party’s performance — that influence their behaviours. This paper illustrates and discusses the role of performance metrics among various parties in innovation systems connected with early research ideas from universities. The empirical part of the paper is based on interviews with 20 researchers and 10 representatives of various innovation system organisations in an EU-based research project. The paper points out how parties in the innovation process saw different reasons to participate which were strongly connected with how each party was evaluated and which caused sub-optimisation in behaviours. Previous research on innovation systems has not focused on the rationales and behaviours of parties. The focus on metrics targets an important point for understanding innovation processes involving several parties and specifically doing so for support organisations that cannot be measured on revenues or profits.

A Regulation and Transaction Cost Perspective on the Design of Corporate Law
Artikel (med peer review)Publikation
Bjuggren, P-O. & Almlöf, H.
Publiceringsår

2019

Sammanfattning

For the corporate business model to be successful, it is important to align the interests of those who control and finance the firm. Corporate law has here an important task to fulfill. It offers a legal framework that can facilitate parties to conclude mutually preferable agreements at low transaction costs. The purpose of this paper is to show how to design corporate law to fulfill this task and apply this knowledge to a Swedish case. A two-dimension model that simultaneously considers both the regulation intensity and the level of default of corporate law is presented. The earlier literature treats these dimensions separately. By adding a transaction cost perspective to our model, we assess different regulatory techniques and examine how the Swedish legislation can be amended to help corporations by offering a standard contract that lowers the transaction costs of contracting. This can be achieved if default rules or standards of opt-out character are combined with other regulatory techniques with lower transaction costs such as opt-in alternatives and menus. We also show how our model can be used in other studies as a tool to analyze the design of legal rules.

A revised perspective on innovation policy for renewal of mature economies – Historical evidence from finance and telecommunications in Sweden 1980–1990
Artikel (med peer review)Publikation
Eriksson, K., Ernkvist, M., Laurell, C., Moodysson, J., Nykvist, R. & Sandström, C.
Publiceringsår

2019

Sammanfattning

What is the role of innovation policy for accomplishing renewal of mature industries in Western economies? Drawing upon an unusually rich dataset spanning 9752 digitized archival documents, we categorize and code decisions taken by policymakers on several levels while also mapping and quantifying the strategic activities of both entrant firms and incumbent monopolists over a decade. Our data concerns two empirical cases from Sweden during the time period 1980–1990: the financial sector and the telecommunications sector. In both industries, a combination of technological and institutional upheaval came into motion during this time period which in turn fueled the revitalization of the Swedish economy in the subsequent decades. Our findings show that Swedish policymakers in both cases consistently acted in order to promote the emergence of more competition and de novo entrant firms at the expense of established monopolies. The paper quantifies and documents this process while also highlighting several enabling conditions. In conclusion, the results indicate that successful innovation policy in mature economies is largely a matter of strategically dealing with resourceful vested interest groups, alignment of expectations, and removing resistance to industrial renewal.

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