2026-09-19T10:58:58Zhttps://dspace.mit.edu/server/oai/requestoai:dspace.mit.edu:1721.1/810262021-07-05T14:03:20Zcom_1721.1_7582com_1721.1_7581col_1721.1_131023
David McLean.
Lee, Yong Seung
Sloan School of Management. Master of Finance Program.
Sloan School of Management. Master of Finance Program.
Sloan School of Management
2013-09-24T19:37:51Z
2013-09-24T19:37:51Z
2013
2013
http://hdl.handle.net/1721.1/81026
857790729
Thesis (M. Fin.)--Massachusetts Institute of Technology, Sloan School of Management, Master of Finance Program, 2013.
Cataloged from PDF version of thesis.
Includes bibliographical references (p. 44-45).
The impact of corporate governance on firm value has been extensively debated by academics and business practitioners. Some studies show that companies that allow minority shareholders to have more control are likely to create greater shareholder value than those firms with concentrated control, while other studies suggest that the impact of having democratic governance is either negligible or even negative. In developed countries institutional investors have a significant stake in most of the companies. Active engagement by institutional investors is expected to decrease agency costs by strengthening monitoring mechanisms of operations and performance evaluations of the management, resulting in an increase in firm value. However, some academics and business practitioners argue that such minority shareholders' active engagement could be detrimental to firm value. In this thesis, I study the influence of institutional investors' active shareholder engagement on firm value and the relationship between the characteristics of corporate governance and firm value of target companies. I review previous studies that have evaluated both the effect of corporate governance and of institutional investors' activism on firm value. I conduct empirical analyses to examine the relationship between the institutions' shareholder engagement and firm value.
by Yong Seung Lee.
M.Fin.
45 p.
eng
Massachusetts Institute of Technology
M.I.T. theses are protected by
copyright. They may be viewed from this source for any purpose, but
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http://dspace.mit.edu/handle/1721.1/7582
Sloan School of Management. Master of Finance Program.
The influence of institutional investors on firm value
Thesis
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<Abstract>The impact of corporate governance on firm value has been extensively debated by academics and business practitioners. Some studies show that companies that allow minority shareholders to have more control are likely to create greater shareholder value than those firms with concentrated control, while other studies suggest that the impact of having democratic governance is either negligible or even negative. In developed countries institutional investors have a significant stake in most of the companies. Active engagement by institutional investors is expected to decrease agency costs by strengthening monitoring mechanisms of operations and performance evaluations of the management, resulting in an increase in firm value. However, some academics and business practitioners argue that such minority shareholders' active engagement could be detrimental to firm value. In this thesis, I study the influence of institutional investors' active shareholder engagement on firm value and the relationship between the characteristics of corporate governance and firm value of target companies. I review previous studies that have evaluated both the effect of corporate governance and of institutional investors' activism on firm value. I conduct empirical analyses to examine the relationship between the institutions' shareholder engagement and firm value.</Abstract>
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