Browsing by Subject "institutional investor"

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  • Wang, Peng (Svenska handelshögskolan, 2014)
    Economics and Society – 272
    This dissertation consists of four self-contained papers. The first two of them concern pyramidal ownership structure, the third one deals with dual-board system, and the last one explores the contemporaneous relation between foreign investment flows and local equity returns. I choose the Chinese stock market as my laboratory. China will soon become the largest economy in the world, and China’s domestic stock markets are growing up rapidly since their establishment in the early 1990s. According to the World Federation of Exchanges (WFE), the number of listed companies in the two domestic stock markets, i.e., the Shanghai Stock Exchange and the Shenzhen Stock Exchange reaches 2,491 with a total market capitalization of 3.7 trillion of U.S. dollars at the end of 2012. Despite this fast growth, extant studies on the Chinese stock market are still limited in scope. Perhaps because researchers’ perceptions on Chinese listed firms still remain with older patterns, such as the dominance of state-owned enterprises (SOEs), the corrupted bureaucracy, the politically-appointed executives, and a market that is inaccessible to foreign investors. In this regard, one of my objectives in this dissertation is to provide some new insights into the modern corporate finance issues among Chinese listed firms. The first essay examines the ownership structure of the Chinese Growth Enterprise Market (GEM). I show that 46% of sample firms are set up in the pyramidal structure. Further, I demonstrate that the owners of most firms in the GEM are families, which stands in stark contrast with the firms listed on the main board in China, which are state-owned. The second essay is naturally an extension of the first one, we investigate Initial Public Offerings (IPOs) of firms on the GEM. The likelihood of a pyramid structure increases with the size of the IPO firm and state control. Our results do not suggest that pyramids are set up to overcome financial constraints. However, we document that pyramid IPOs are discounted before the IPO. The price to book ratio estimated at the subscription price is significantly lower for pyramid IPOs compared to stand-alone IPOs. The third one examines board effectiveness and independence by studying all firms listed in China from 2000 to 2009. I find a significant inverse relationship between supervisory board size and firm performance. This result indicates that large supervisory board size per se causes free-rider and communication or coordination problems, as occurs with boards of directors. The last essay examines the trading behavior and price effects of foreign institutions under the celebrated Qualified Foreign Institutional Investor (QFII) scheme on all non-financial firms in the Chinese A-share markets. I find that foreign institutions in the Chinese A-share markets do not show positive or negative feedback trading; however, their flows have a strong impact on future equity returns because of informational advantage.
  • Mäenpää, Jani (Helsingin yliopisto, 2020)
    The purpose of the study is to research the principal-agent issues in institutional forest asset management industry. This study aims to broaden the understanding of principal-agent issues and show in what kind of forms they could take place in the institutional forest asset management industry. The concepts of institutional investing, forest asset management and theory behind principal-agent problems are presented. This study uses qualitative research methods, with data sourced from secondary sources. Globally, the institutional investors’ asset allocations to forestry have been small as a percentage share of the total assets under management. As forest management needs large resources, the outsourcing of forest asset management could be more cost efficient, if the investor would not be comfortable in investing substantial resources into in-house management capabilities. Outsourcing means long value chain of agents, information asymmetries and possibly conflicting incentive structures. Timber management organizations or TIMOs are usually the key link between institutional investors and timberland. The results would indicate that principal-agent issues could be present in the institutional forest asset management industry. This would partly be due to the highly specialized nature of forest as a natural asset class, which needs special skills that many general institutional investors do not have in-house. Solutions to principal-agent problems could be found from digital solutions that could improve the management of knowledge and reduce the information asymmetries. Further research would be needed to study whether the principal-agent issues are a problem or an opportunity for the institutional investors. In addition, the further research could study whether the institutional investors are already using digital solutions in reducing the information asymmetry risks in outsourced investment decisions. The limitations of this thesis are that results might not be easily generalized. Because previous research in principal-agent issues in forest investing is limited, this research aims to contribute to the academic literature research in the field by broadening the research done on the topic.