Institutional Block-Holdings of UK Firms: Do Corporate Governance Mechanisms Matter?

36 Pages Posted: 23 Feb 2007 Last revised: 20 Dec 2009

See all articles by Arif Khurshed

Arif Khurshed

University of Manchester - Manchester Business School, Division of Accounting Finance

Steve Lin

University of Memphis

Mingzhu Wang

University of Manchester

Date Written: December 7, 2009

Abstract

Using a sample of UK firms we find that institutional block-holding is negatively associated with directors’ ownership and is positively associated with board composition, suggesting that institutional block-holders regard directors’ ownership and board composition as substitute and complementary control mechanisms, respectively. We also show that UK institutional block-holders prefer smaller firms and firms with a shorter listing history. The presence of institutional block-holders is associated with smaller boards and lower trading liquidity. Finally, our results indicate that the investment preference of UK institutional block-holders varies with the level of their shareholding.

Keywords: institutional ownership, directors’ ownership, board structure, corporate governance

JEL Classification: G3, H39

Suggested Citation

Khurshed, Arif and Lin, Steve and Wang, Mingzhu, Institutional Block-Holdings of UK Firms: Do Corporate Governance Mechanisms Matter? (December 7, 2009). Available at SSRN: https://ssrn.com/abstract=1519953 or http://dx.doi.org/10.2139/ssrn.1519953

Arif Khurshed (Contact Author)

University of Manchester - Manchester Business School, Division of Accounting Finance ( email )

Crawford House
Oxford Road
Manchester, M15 6PB
United Kingdom
+44 0 161 275 4475 (Phone)
+44 0 161 275 4023 (Fax)

Steve Lin

University of Memphis ( email )

Memphis, TN 38152
Memphis, TN usa 38152-3370
United States
38152 (Fax)

Mingzhu Wang

University of Manchester ( email )

Oxford Road
Manchester, M13 9PL
United Kingdom

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