ثبات مالکیت نهادی و عملکرد بی اچ سی

n this study, the association between performance of BHCs and institutional ownership stability is investigated and contrasted to those found for the less regulated utility and industrial firms in order to determine whether regulation displaces owner monitoring. We employ a simultaneous equations model treating firm performance and institutional ownership stability as endogenous variables. Several results are obtained. First, BHC performance is positively associated with institutional ownership stability. Second, this association is weaker for BHCs than for comparable utility and industrial firms, possibly because of the substitution of regulation for owner monitoring in banking. Third, this association is stronger in the recent deregulated years and for BHCs with lower likelihood of regulatory intervention.

In the recent decades, shares owned by individuals have been increasingly held by institutional investors through vehicles such as mutual and pension funds, making institutional investors the largest shareholders of publicly traded firms. This trend has raised some interesting questions regarding the monitoring influence of institutional ownership on corporate governance and firm performance (Karpoff, 2001 and Gillan and Starks, 2003). Given that different institutional investors have different investment agenda and investment horizons (Woidtke, 2002 and Del Guercio, 1996), some choose to monitor the firms and exert influence on the management, while others focus on information gathering and short-term trading profits. The choice between these two strategies is likely to be dependent on shareholding stability. Stable (long-term) institutional investors are more likely to engage in monitoring because they have a longer horizon to learn about the firms and also more opportunities to influence the management (Chen et al., 2007). In contrast, unstable (short-term) institutional investors tend to be involved in frequent trading based on information (Yan and Zhang, in press)

The empirical results obtained here show that BHC performance is positively associated with ownership stability. One interpretation of this finding is that these investors effectively monitor the BHCs. However, the institutional investors’ influence on BHCs is weaker than that on the matched utility and industrial firms, possibly due to the substitution of regulation for private monitoring. In addition, the influence of institutional ownership stability is found to have increased with deregulation, and to be higher for BHCs with lower likelihood of regulatory intervention. These results call for a reconsideration of corporate governance in the banking industry. If institutional investors can effectively monitor BHCs, a question arises as to whether government regulations just displace private efforts to evaluate and control financial firms, and possibly result in these functions being carried out less efficiently. If regulation does indeed displace private market monitoring, the optimal level of regulation will be lower.