[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/eee/reveco/v95y2024ics1059056024003861.html
   My bibliography  Save this article

Does common institutional ownership restrain corporate financialization?

Author

Listed:
  • Li, Yumin
  • Zhu, Lei
  • Ke, Yanrong
  • Wu, Xiaohui
Abstract
Using a sample of Chinese non-financial listed firms from 2007 to 2021, we investigate the impact of common institutional ownership on corporate financialization. Our results show that common institutional ownership generates the “synergy effect” by restraining corporate financialization. We then assess the channels and find that common institutional ownership plays dual roles as an “information disseminator” and a “governance practitioner,” effectively curbing corporate financialization by enhancing information acquisition abilities and mitigating managerial myopia. Our cross-sectional tests reveal that the “synergy effect” is more pronounced when there is common institutional ownership without business affiliations or with larger network size, and when firms have lower state or management ownership. Finally, common institutional ownership guides firms toward developing the core business while enhancing firm value. Our findings have potential implications for regulatory authorities in guiding the benign interaction between real and virtual economies and preventing systemic financial risks.

Suggested Citation

  • Li, Yumin & Zhu, Lei & Ke, Yanrong & Wu, Xiaohui, 2024. "Does common institutional ownership restrain corporate financialization?," International Review of Economics & Finance, Elsevier, vol. 95(C).
    • Handle: RePEc:eee:reveco:v:95:y:2024:i:c:s1059056024003861
    DOI: 10.1016/j.iref.2024.103394
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1059056024003861
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.iref.2024.103394?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Common institutional ownership; Corporate financialization; Information disseminator; Governance practitioner;
    All these keywords.

    JEL classification:

    • G0 - Financial Economics - - General
    • G2 - Financial Economics - - Financial Institutions and Services
    • G3 - Financial Economics - - Corporate Finance and Governance

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:reveco:v:95:y:2024:i:c:s1059056024003861. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/620165 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.