Do foreign institutional investors improve board monitoring?

IF 5.4 2区经济学 Q1 BUSINESS, FINANCE Journal of International Financial Markets Institutions & Money Pub Date : 2024-02-09 DOI:10.1016/j.intfin.2024.101962

Biwesh Neupane , Chandra Thapa , Andrew Marshall , Suman Neupane , Chaman Shrestha

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Abstract

Exploiting the global financial crisis of 2007–08 as an exogenous shock that resulted in a significant decline in the ownership of foreign institutional investors (FIIs) in the Indian equity market, we find evidence of a causal link between FIIs’ ownership and different dimensions of board monitoring. Specifically, the empirical results suggest that higher FIIs ownership leads to lower board size, busyness, network size, CEO power, CEO pay, and improved board diligence. However, we also document a negative link between FIIs’ ownership and board independence, indicating that FIIs do not view independent directors as effective monitors. In terms of implications, our results suggest that improved board monitoring, induced by higher FIIs’ ownership, leads to higher firm valuation and innovation activities.

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外国机构投资者能否改善对董事会的监督？

2007-08 年的全球金融危机导致外国机构投资者（FII）在印度股票市场的持股比例大幅下降，我们利用这一外生冲击，找到了 FII 持股比例与董事会监督的不同维度之间存在因果关系的证据。具体来说，实证结果表明，外国机构投资者持股比例越高，董事会规模、工作繁忙程度、网络规模、首席执行官权力、首席执行官薪酬就越低，董事会的勤勉程度也就越高。不过，我们也发现，外国投资机构持股比例与董事会独立性之间存在负相关，这表明外国投资机构并不认为独立董事是有效的监督者。就影响而言，我们的研究结果表明，外国投资机构持股比例越高，对董事会的监督就越强，从而导致公司估值和创新活动越多。

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来源期刊

Journal of International Financial Markets Institutions & Money Multiple-

CiteScore

6.60

自引率

10.00%

发文量

142

期刊介绍： International trade, financing and investments, and the related cash and credit transactions, have grown at an extremely rapid pace in recent years. The international monetary system has continued to evolve to accommodate the need for foreign-currency denominated transactions and in the process has provided opportunities for its ongoing observation and study. The purpose of the Journal of International Financial Markets, Institutions & Money is to publish rigorous, original articles dealing with the international aspects of financial markets, institutions and money. Theoretical/conceptual and empirical papers providing meaningful insights into the subject areas will be considered. The following topic areas, although not exhaustive, are representative of the coverage in this Journal. • International financial markets • International securities markets • Foreign exchange markets • Eurocurrency markets • International syndications • Term structures of Eurocurrency rates • Determination of exchange rates • Information, speculation and parity • Forward rates and swaps • International payment mechanisms • International commercial banking; • International investment banking • Central bank intervention • International monetary systems • Balance of payments.

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