Institutional investors, financial health, and equity valuation
Research output: Journal Publications and Reviews (RGC: 21, 22, 62) › 21_Publication in refereed journal › peer-review
Author(s)
Detail(s)
| Original language | English |
|---|---|
| Pages (from-to) | 151-173 |
| Journal / Publication | Asia-Pacific Journal of Accounting and Economics |
| Volume | 17 |
| Issue number | 2 |
| Publication status | Published - Aug 2010 |
| Externally published | Yes |
Link(s)
Abstract
We investigate the relation between institutional ownership, financial health, and the market valuation weights on earnings and the book value of equity. We find that the valuation weight on earnings (book value) increases (decreases) with the level of institutional ownership for profit firms, while that on book value increases with the level of institutional ownership for loss firms. This valuation effect is not subsumed by incorporating current measures of financial health and is mainly driven by institutions with long investment horizons and monitoring incentives. We conclude that the institutional valuation effect is consistent with institutions playing a positive governance role.
Research Area(s)
- Equity valuation, Financial health, Institutional ownership
Citation Format(s)
Institutional investors, financial health, and equity valuation. / Dhaliwal, Dan S.; Li, Oliver Zhen; Xie, Hong.
In: Asia-Pacific Journal of Accounting and Economics, Vol. 17, No. 2, 08.2010, p. 151-173.Research output: Journal Publications and Reviews (RGC: 21, 22, 62) › 21_Publication in refereed journal › peer-review
