SavedAdd your journal

Journals / Kafkas Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi / 2026 / Cilt: 16 Sayı: 31

DOES CORPORATE GOVERNANCE MATTER FOR INSTITUTIONAL INVESTORS? INSIGHTS FROM INTERNATIONAL EVIDENCE

KURUMSAL YÖNETİM KURUMSAL YATIRIMCILAR İÇİN ÖNEMLİ Mİ? ULUSLARARASI KANITLARDAN ÇIKARIMLAR

İsmail Hakkı Ünal(İZMİR DEMOKRASİ ÜNİVERSİTESİ)0000-0003-4465-9045
Hüseyin Temiz(SAMSUN UNIVERSITY)0000-0003-0735-8884
Pages
85–111
Publication Date
2025-06-27
🏛️Bibliographic metadata and full text access for this article are provided via DergiPark.
DergiPark Record ↗
✨

AI Summary & Key Takeaways

AI Insight
⚡ TL;DR(Too Long; Didn't Read)

The results show that firms with independent board members, a higher representation of women on their boards, and a separation between CEO and chairman roles share characteristics that attract institutional investors, encouraging them to invest in these firms’ shares.

📌 3 Key Takeaways

🎯
Objective & Hypothesis:We examine the impact of firms’ board structure, as a significant provision of firm-level corporate governance mechanism, institutional investors’ investment decisions.
📊
Key Findings & Data:The results show that firms with independent board members, a higher representation of women on their boards, and a separation between CEO and chairman roles share characteristics that attract institutional investors, encouraging them to invest in these firms’ shares.
💡
Conclusion & Impact:The findings are robust to several sensitivity tests, including alternative measures of firm-level corporate governance, controlling for country fixed effects, and including additional control variables.
🔬Design:Araştırma Makalesi
📍Scope:Comprehensive Sample
⚙️Variables:Kurumsal yatırımcı · kurumsal yönetim · yönetim kurulu yapısı

Abstract

We examine the impact of firms’ board structure, as a significant provision of firm-level corporate governance mechanism, institutional investors’ investment decisions. The results show that firms with independent board members, a higher representation of women on their boards, and a separation between CEO and chairman roles share characteristics that attract institutional investors, encouraging them to invest in these firms’ shares. Furthermore, the number of board members does not have a effect on the investment decisions of institutional investors. Similar results are observed for domestic and foreign institutional investors, indicating that these sub-groups share common factors influencing their investment decisions, except for the factor of CEO duality. The findings are robust to several sensitivity tests, including alternative measures of firm-level corporate governance, controlling for country fixed effects, and including additional control variables.

Özet

Bu çalışma, firmaların yönetim kurulu yapısının, kurumsal yönetim mekanizmasının önemli bir unsuru olarak, kurumsal yatırımcıların yatırım kararları üzerindeki etkisini incelemektedir. Bulgular, bağımsız yönetim kurulu üyelerine sahip olan, yönetim kurullarında kadın temsili daha yüksek olan ve CEO ile yönetim kurulu başkanı rollerinin ayrıldığı firmaların, kurumsal yatırımcıları çekme ve bu firmaların hisselerine yatırım yapmaya teşvik etme özelliklerine sahip olduğunu göstermektedir. Ek olarak, firma yönetim kurulu üye sayısının kurumsal yatırımcıların yatırım kararları üzerinde benzer bir etkisi bulunmamaktadır. Yerli ve yabancı kurumsal yatırımcılar için benzer sonuçlar gözlemlenmiş olup, CEO’nun çift rol üstlenmesi (CEO duality) faktörü dışında bu alt grupların yatırım kararlarını etkileyen ortak faktörlere sahip olduğu görülmüştür. Elde edilen bulgular firma düzeyinde kurumsal yönetimin alternatif ölçümlerini kullanarak, ülke sabit etkilerini kontrol ederek ve ek kontrol değişkenlerini dahil ederek güvenilirliği test edilmiştir.

🔖

Cite This Article

Ünal, İ. H., Temiz, H. (2025). DOES CORPORATE GOVERNANCE MATTER FOR INSTITUTIONAL INVESTORS? INSIGHTS FROM INTERNATIONAL EVIDENCE. Kafkas Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, Cilt: 16 Sayı: 31, 85–111. https://doi.org/10.36543/kauiibfd.2025.004

📄 Full Text PDF Viewer

📄

PDF görüntüleyici hazırlanıyor...

References (65)

  1. Abor, J. & Biekpe, N. (2007). Corporate governance, ownership structure and performance of SMEs in Ghana: Implications for financing opportunities. Corporate Governance: The International Journal of Business in Society, 7(3), 288-300. doi: 10.1108/14720700710756562.
  2. Abu Alia, M., Dwekat, A., Meqbel, R., Hannoun, T., Shakhshir, I., & Naser, A. (2024). Can effective board drive environmental innovation? The moderating power of CSR committee. Journal of Financial Reporting and Accounting, (ahead-of-print). doi: 10.1108/JFRA-05-2024-0280
  3. Aggarwal, R., Erel, I.F.M. & Matos, P. (2011). Does governance travel around the world? Evidence from institutional investors, Journal of Financial Economics, 100(1), 154-181.
  4. Ali, A., Durtschi, C., Lev, B., & Trombley, M. (2004). Changes in institutional ownership and subsequent earnings announcement abnormal returns. Journal of Accounting, Auditing & Finance, 19 (3), 221–248.
  5. Al‐Najjar, B. (2010). Corporate governance and institutional ownership: evidence from Jordan. Corporate Governance: The international journal of business in society, 10(2), 176-190.
  6. Amel-Zadeh, A., & G. Serafeim. (2017). Why and how investors use ESG information: Evidence from a global survey. Financial Analysts Journal, 74(3), 87–103.
  7. Aras, G. & Müslümov, A. (2003). Sermaye Piyasalarının Gelişmesinde Kurumsal Yatırımcıların Rolü; OECD Ülkeleri ve Türkiye Örneği. İstanbul: Kurumsal Yatırımcılar Derneği.
  8. Bansal, S., & Thenmozhi, M. (2019). Does board composition matter to institutional investors? Journal of Emerging Market Finance, 18(2), 238-266.
  9. Barko, T., M. Cremers, & L. Renneboog. (2018). Shareholder engagement on environmental, social, and governance performance. Journal of Business Ethics, 180(2), 777-812.
  10. Bartov, E., Radhakrishnan, S., & Krinsky, I. (2000). Investor sophistication and patterns in stock returns after earnings announcements. The accounting review, 75(1), 43-63.
  11. Bhatia, A., & Kumari, P. (2024). The moderating effect of corporate governance factors on capital structure and performance: evidence from Indian companies. Corporate Governance: The International Journal of Business in Society, 24(5), 1083-1102.
  12. Bird, A., & Karolyi, S. A. (2016). Do institutional investors demand public disclosure? The Review of Financial Studies, 29(12), 3245-3277.
  13. Boehmer, E., & Kelley, E.K, (2009). Institutional investors and the informational efficiency of prices. The Review of Financial Studies, 22 (9), 3563–3594.
  14. Bushee, B. J., Carter, M. E., & Gerakos, J. (2014). Institutional investor preferences for corporate governance mechanisms. Journal of Management Accounting Research, 26(2), 123-149.
  15. Cai, W., Lee, E., Xu, A. L., & Zeng, C. C. (2019). Does corporate social responsibility disclosure reduce the information disadvantage of foreign investors? Journal of International Accounting, Auditing and Taxation, 34, 12-29. doi: 10.1016/j.intaccaudtax.2019.02.001.
  16. Caixe, D. F., Pavan, P. C. P., Maganini, N. D., & Sheng, H. H. (2024). Foreign institutional ownership and firm value: Evidence of “locust foreign capital” in Brazil. Emerging Markets Finance and Trade, 60(2), 310-327.
  17. Chang, C. (2010). Information footholds: Isolating local presence as a factor in analyst performance and trading. Journal of International Money and Finance, 29, 1094-2218.
  18. Chen, L., Han, M., Li, Y., Megginson, W. L., & Zhang, H. (2022). Foreign ownership and corporate excess perks. Journal of International Business Studies, 53(1), 72-93.
  19. Collins, D. W., Gong, G., & Hribar, P. (2003). Investor sophistication and the mispricing of accruals. Review of Accounting Studies, 8, 251-276.
  20. Coval, J. D., & Moskowitz, T. J. (1999). Home bias at home: Local equity preference in domestic portfolios. The Journal of Finance, 54(6), 2045-2073.
  21. Covrig, V., Lau, S. T., & Ng, L. (2006). Do domestic and foreign fund managers have similar preferences for stock characteristics? A cross-country analysis. Journal of International Business Studies, 37, 407-429.
  22. Dağlar, H. (2007), Kurumsal yatırımcılar olarak emeklilik yatırım fonları ve performanslarının değerlendirilmesi. İstanbul: Türkiye Bankalar Birliği.
  23. De La Hoz, M., Pombo, C., & Taborda, R. (2018). Does board diversity affect institutional investor preferences? Evidence from Latin America. Universidad de los Andes, Facultad de Economía, 1-54, Documento CEDE No. 2018-07. doi: 10.2139/ssrn.3116911
  24. Djankov, S., La Porta, R., Lopez-de-Silanes, F., & Shleifer, A. (2008). The law and economics of self-dealing. Journal of financial economics, 88(3), 430-465.
  25. Döring, S., Drobetz, W., El Ghoul, S., Guedhami, O., & Schröder, H. (2021). Cross-country determinants of institutional investors’ investment horizons. Finance Research Letters, 39, 101641.
  26. Drobetz, W., El Ghoul, S., Fu, Z., & Guedhami, O. (2024). Institutional investors and corporate environmental costs: The roles of investment horizon and investor origin. European Financial Management, 30(2), 727-769.
  27. Eccles, R. G., Serafeim, G., & Krzus, M. P. (2011). Market interest in nonfinancial information. Journal of Applied Corporate Finance, 23(4), 113-127.
  28. Elyasiani, E., Jia, J. J., & Mao, C. X. (2010). Institutional ownership stability and the cost of debt. Journal of Financial Markets, 13(4), 475-500.
  29. Fama, E. F. (1970). Efficient capital markets. Journal of finance, 25(2), 383-417.
  30. Feng, J., Tang, S., & Zhong, J. (2024). Can corporate environmental, social, and governance performance influence foreign institutional investors to hold shares? Evidence from China. Business Strategy and the Environment, 33(5), 4310-4330.
  31. Ferreira, M. A., & Matos, P. (2008). The colors of investors’ money: The role of institutional investors around the world. Journal of financial economics, 88(3), 499-533.
  32. Finkelstein, S., & D’aveni, R. A. (1994). CEO duality as a double-edged sword: How boards of directors balance entrenchment avoidance and unity of command. Academy of Management journal, 37(5), 1079-1108.
  33. Ghabri, Y. (2022). Legal protection systems, corporate governance and firm performance: a cross-country comparison. Studies in Economics and Finance, 39(2), 256-278.
  34. Gillan, S., & Starks, L. T. (2003). Corporate governance, corporate ownership, and the role of institutional investors: A global perspective. Weinberg Center for Corporate Governance Working Paper, (2003-01).
  35. Gillan, S., & Starks, L. (2007). The evolution of shareholder activism in the USA. Journal of Applied Corporate Finance, 19(1), 55-73.
  36. Green, J., Hand, J. R., & Soliman, M. T. (2011). Going, going, gone? The apparent demise of the accruals anomaly. Management Science, 57(5), 797-816.
  37. Grinblatt, M., & Keloharju, M. (2000). The investment behavior and performance of various investor types: a study of Finland's unique data set. Journal of financial economics, 55(1), 43-67.
  38. Gull, A., Hussain, N., Akbar Khan, S., Nadeem, M., & Mansour Zalata, A. (2023). Walking the talk? A corporate governance perspective on corporate social responsibility decoupling. British Journal of Management, 34(4), 2186-2211.
  39. Hanson, D., Lyons, T., Bender, J., Bertocci, B., & Lamy, B. (2017). Analysts' roundtable on integrating ESG into investment decision‐making. Journal of Applied Corporate Finance, 29(2), 44-55.
  40. Hanson, S. G., & Sunderam, A. (2014). The growth and limits of arbitrage: Evidence from short interest. The Review of Financial Studies, 27(4), 1238-1286.
  41. Harjoto, M., Jo, H., & Kim, Y. (2017). Is institutional ownership related to corporate social responsibility? The nonlinear relation and its implication for stock return volatility. Journal of Business Ethics, 146, 77-109.
  42. Hong, H., & Shore, E. (2023). Corporate social responsibility. Annual Review of Financial Economics, 15(1), 327-350. doi: 10. 2139/ ssrn. 4267476.
  43. Iwasaki, I., & Mizobata, S. (2018). Post‐privatization ownership and firm performance: A large meta‐analysis of the transition literature. Annals of Public and Cooperative Economics, 89(2), 263-322.
  44. Kang, J. K. (1997). Why is there a home bias? An analysis of foreign portfolio equity ownership in Japan. Journal of financial economics, 46(1), 3-28.
  45. Ke, B., & Ramalingegowda, S. (2005). Do institutional investors exploit the post-earnings announcement drift? Journal of Accounting and Economics, 39(1), 25-53.
  46. Leuz, C., Lins, K. V., & Warnock, F. E. (2009). Do foreigners invest less in poorly governed firms? The Review of Financial Studies, 22(8), 3245-3285. doi: 10.1093/rfs/hhn089
  47. Liu, N., Bredin, D., Wang, L., & Yi, Z. (2014). Domestic and foreign institutional investors’ behavior in China. European Journal of Finance, 20(7-9), 728-751.
  48. Lotto, J. (2023). Demographic and socio-economic factors influencing households & investment choices in Tanzania. Cogent Business & Management, 10(1), 2176276. doi: 10.1080/23311975.2023. 2176276
  49. Lu, S. L., & Li, Y. H. (2019). Effect of corporate governance on institutional investors’ preferences: An empirical investigation in Taiwan. Journal of Risk and Financial Management, 12(1), 32.
  50. Matemilola, B. T., Bany-Ariffin, A. N., & Nassir, A. M. (2018). Interaction effects of country-level governance quality and debt on stock returns in developing nations. Capital Markets Review, 26(1), 19-35.
  51. McCahery, J. A., Sautner, Z., & Starks, L. T. (2016). Behind the scenes: The corporate governance preferences of institutional investors. The Journal of Finance, 71(6), 2905-2932.
  52. Medina, A., De La Cruz, A. and Tang, Y. (2022). Corporate ownership and concentration. OECD Corporate Governance Working Papers.
  53. Nguyen, T. X. H., Pham, T. H., Dao, T. N., Nguyen, T. N., & Tran, T. K. N. (2020). The impact of foreign ownership and management on firm performance in Vietnam. The Journal of Asian Finance, Economics and Business, 7(9), 409-418.
  54. Park, S. R., & Jang, J. Y. (2021). The impact of ESG management on investment decision: Institutional investors’ perceptions of country-specific ESG criteria. International Journal of Financial Studies, 9(3), 48. doi: 10.3390/ijfs9030048
  55. Phan, Q. T. (2024). Country-level governance quality, foreign ownership, and firm investment: evidence from WBES database. Cogent Economics & Finance, 12(1), 2302633.
  56. Pombo, C., & De La Hoz, M. C. (2021). Director attributes and institutional investor choices: Evidence in Latin America, Managerial Finance, 47(10), 1511-1532.
  57. Saona, P., & San Martín, P. (2016). Country level governance variables and ownership concentration as determinants of firm value in Latin America. International Review of Law and Economics, 47, 84-95.
  58. Schnatterly, K., & Johnson, S. G. (2014). Independent boards and the institutional investors that prefer them: Drivers of institutional investor heterogeneity in governance preferences. Strategic Management Journal, 35(10), 1552-1563.
  59. Shahid, M. S., & Abbas, M. (2019). Does corporate governance play any role in investor confidence, corporate investment decisions relationship? Evidence from Pakistan and India. Journal of Economics and Business, 105, 105839.
  60. Shleifer, A., & Vishny, R. W. (2008). Large shareholders and corporate control. International Library of Critical Writings In Economics, 214(3), 493.
  61. Taran, A., & Mironiuc, M. (2018). Influence of local versus foreign corporations, as shareholders, on financial performance of Romanian listed companies. Review of Economic and Business Studies, 11(1), 97-116.
  62. Velte, P. (2023). Which institutional investors drive corporate sustainability? A systematic literature review. Business Strategy and the Environment, 32(1), 42-71.
  63. Yildiz, Y., Karan, M. B., & Ozkan, A. (2019). Is conservative reporting attractive to foreign institutional investors? Evidence from an emerging market. The European Journal of Finance, 25(12), 1099-1121.
  64. Wahab, E. A. A., How, J., & Verhoeven, P. (2008). Corporate governance and institutional investors: evidence from Malaysia. Asian Academy of Management Journal of Accounting and Finance, 4(2), 67-90.
  65. Wu, C. H. (2021). On the moderating effects of country governance on the relationships between corporate governance and firm performance. Journal of Risk and Financial Management, 14(3), 140.