INVESTMENT PREFERENCES OF INSTITUTIONAL INVESTORS

Authors : Nida Abdioğlu

Pages : 1-19

Doi:10.11611/JMER9

View : 11 | Download : 4

Publication Date : 2013-04-01

Article Type : Other

Abstract :This paper examines the determinants of institutional investment. Firm specific characteristics, information asymmetry level and governance mechanisms are the main determinants that are included in this study. Large firms, firms with low book-to-market-ratio, firms with less leverage, firms with high level of past performance, less volatile firms and firms with high liquidity are chosen by institutional investors. They also invest in stocks which have low level of information asymmetry. Institutional investors prefer to invest in countries with high level of investment protection and strong disclosure requirements. Finally, they give importance to country level governance quality. As a result, they invest in countries with high level of governance quality.
Keywords : Institutional investors, asymmetric information, governance mechanisms, investor protection