Are foreign institutional investors long-term investors?: Korean evidence

Kyung Soon Kim,Jin Hwon Lee,Yun W. Park 한국재무학회 2020 한국재무학회 학술대회 Vol.2020 No.08

There has been limited research on the incentives foreign institutional investors face in foreign markets. We investigate whether foreign institutional investors are long term investors using the Korean stock market data. We measure the influence level of foreign institutions using the trading share of foreign institutions in the total trading volume of a firm as well as ownership of foreign institutions. We find a positive relationship between the influence level of foreign institutional investors and opportunistic earnings management. This result suggests that they have a short investment horizon and seek information-based trades. We also find that the positive relationship between foreign institutional investors and earnings management intensifies during periods of low market growth, and in firms with lower managerial ownership or firms unaffiliated with large conglomerates. These findings suggest that monitoring incentive and investment horizon of foreign institutional investors depend on economic environment, market growth and corporate governance characteristics in emerging markets.

기관투자자의 감시 특성이 채권 등급에 미치는 영향

이상철 한국회계정책학회 2024 회계와 정책연구 Vol.29 No.3

[연구목적]본 연구에서는 기관투자자의 감시특성이 채권 등급에 미치는 효과를 분석한다. 연구목적을 달성하기 위해, 독립적인 대규모 기관투자자의 존재가 채권 등급을 높이는지 검증한다. 그리고 피투자기업 경영자에 대한 감시 경험과 전문성을 나타내는 기관투자자의 투자기간이 채권 등급을 높이는지 검증한다. [연구방법]피투자기업과 무관한 독립적인 기관투자자 가운데 5% 이상 지분을 보유한 기관투자자를 독립적인 대규모 기관투자자로 분류한다. 2003년부터 2014년까지 한국거래소 유가증권시장에 상장된 6,550개 비금융기업-년 자료를 표본으로 선정한다. 선정된 표본에 대해 다중회귀분석을 실시하여, 독립적인 대규모 기관투자자의 존재와 투자기간이 채권 등급에 미치는 효과를 분석한다. [연구결과]독립적인 대규모 기관투자자의 존재와 기관투자자 투자기간은 채권 등급을 높이는 것으로 나타났다. 또한 독립적인 대규모 기관투자자가 채권 등급을 높이는 효과가 기관투자자 투자기간이 채권 등급을 높이는 효과보다 더 크게 나타났다. 그리고 독립적인 대규모 기관투자자를 가진 기업이 그렇지 않은 기업보다 기관투자자 투자기간이 채권 등급에 미치는 긍정적인 효과가 더 크게 나타났다. [정책적 시사점]본 연구는 규제기관으로 하여금 한국 자본시장에서 기관투자자의 역할을 활성화하는 데 필요한 규정을 검토하고 만드는 데 필요한 근거를 제공한다. 그리고 본 연구 결과는 채권 등급 결정에 기관투자자의 감시 특성이 반영될 필요가 있다는 실증적 근거를 제공한다. [Purpose]This study empirically verifies the effects of institutional investors’ monitoring characteristics on bond ratings. To meet this research goal, I investigate whether the existence of institutional investors as independent block shareholders, who have the incentive and expertise to monitor firm managers independently, increases bond ratings. At the same time, I examine whether the investment horizon of institutional investors-a measure of experience and expertise for institutional investors to monitor investee’s management-increases bond ratings. [Methodology]Among the outside institutional investors that are not related to investee firms, I categorized institutional investors whose shares represent 5% or more as outside block institutional investors. Using a sample of 6,550 non-financial firm-year data points from companies listed on the Korea Stock Exchange for 2003-2014, I perform multiple regression models to verify the effects of both the existence of outside block institutional investors and the length of the investment horizon on bond ratings. [Findings]I find that both the existence of institutional investors as an independent block shareholders and the investment horizon of institutional investors are positively related to bond ratings. In addition, the effect of outside block institutional investors on bond ratings is stronger than the impact of the investment horizon of institutional investors. Furthermore, the impact of the investment horizon of institutional investors on bond ratings is more powerful in firms with outside block institutional investors than in companies without them. [Policy Implications]The regulatory authorities may need to review current regulations and create new conditions that will facilitate the roles of institutional investors in the Korean capital market. In addition, the findings of this study suggest that institutional investors’ monitoring characteristics should be incorporated into the credit rating process.

의결권행사 허용 이후 국내 기관투자자의 소유지분비율과 기업가치에 관한 연구

김성우,이기환,이미영 한국기업경영학회 2012 기업경영연구 Vol.19 No.3

The purpose of this study is to substantiate whether domestic institutional investors have practically performed as expected from the market after institutional investors were granted to vote in 2003 considering how it has been 10 years since domestic stock market has adopted full opening and global standard financial system after IMF currency crisis. The role of institutional investors have turned from passive activity of selling shares, expressing their discontent towards existing mismanagement, to positive attitudes, such as voting, which affects corporate governance. According to the existing theories, due to their large-scale investments, there are various complications that prevent institutional investors from withdrawal. In other words, stock market decline from selling large stake of share brings heavy loss for them. Therefore, by means of not only exercising the voting rights but also monitoring manager effectively, institutional investors will try to affect increase in corporate value by improving transparency in corporate management. In order to analyze the relationship between the role of domestic institutional investors and corporate value, the empirical analysis has been done by taking the basis of the 8-year data from 2003 to 2010, which promotes voting rights of institutional investors into account and domestic institutional investors’ equity rate, total assets, the rate between total assets and R&D costs for the independent variable, while using Tobin’s Q, a substitution of enterprise value, as the dependent variable. For comprehensive empirical analysis, the analysis of eight-year data has been divided from 2003 to 2006, when domestic institutional investors’ role has been proposed, as first half, and from 2007 to 2010, when domestic institutional investors’ role has been matured, as second-half. Through the analysis, during the period of 2003 to 2006, the results for the current year’s domestic institutional investors equity rate and corporate value did not show a positive relationship between domestic institutional investors’ equity and corporate value. However, during the period of 2007 to 2010, the results for the current year’s domestic institutional investors equity rate and corporate value showed a positive relationship. The finding of these results could possibly offer an evidence of learning period necessity between the domestic institutional investors’ effort of performing the institutional investors’ role and substantially increase of corporate value. Meanwhile, the results for the previous year’s domestic institutional investors equity rate and corporate value showed positive relationship for both first and second half of the duration, as well as entire eight-year period. The results indicated that the domestic institutional investors have consistently kept up their faithful effort of performing the institutional investors’ role. The findings of this study out of analyzing factors which have significant effect on the level of domestic institutional ownership in companies and the relationship between the level of institutional ownership in companies and the value of corporations could possibly offer a compelling evidence of the importance of fostering institutional investors in the future at a time when the importance of the role of institutional investors is on the rise. To supplement this study, more objective theoretical models that can bring out the relationship between the role of domestic institutional investors and corporate value and the determinants must be created, and also, further studies that can analyze it empirically are needed. 본 연구는 IMF 외환위기 이후 국내 증권시장에 글로벌 스텐다드한 금융시스템이 도입되고 2003년 기관투자자에게 의결권행사가 허용된 이후 국내 기관투자자들이 실질적으로 의미 있는 역할을 수행하였는지를 검증해 보고자 하는 것이다. 국내 기관투자자의 역할과 기업가치와의 관계를 분석하기 위하여 기관투자자에게의결권 행사를 허용한 2003년부터 2010년까지의 8년간의 자료를 바탕으로 실증분석을 하였다. 분석의 독립 변수로는 국내 기관투자자의 소유지분비율, 총자산, 총자산 대비 연구개발비용의 비율 등을 종속변수로는 기업가치의 대용치인 Tobin’s Q를 사용하였다. 분석결과 2003년부터 2006년까지의 전반기에는 당기 연도의국내 기관투자자 소유지분비율과 기업가치와의 관계가 유의적인 관계를 보이지 않는 반면, 2007년부터 2010년까지의 후반기에는 양(+)의 유의적인 관계를 보였다. 이는 국내 기관투자자의 역할이 제기되기 시작한 2003년부터 일정기간동안 역할을 수행하려는 노력은 있었으나 실질적으로 이러한 행동이 기업가치의 제고라는 결과를 가져오기까지는 학습시간이 필요하였음을 보여주는 것이라 할 수 있다. 한편 직전 연도의 국내 기관투자자 소유지분비율과 기업가치와의 관계를 분석한 결과 전체기간 뿐만 아니라 전반기 및 후반기 모두 양(+)의 유의한 관계를 나타내고 있다. 이는 국내 증권시장의 기관화현상이 커져감에 따라 국내 기관투자자도 본연의 역할에 충실하려는 행태가 지속되었음을 의미하는 것이라 할 수 있다

기관투자자의 특성과 감사보수와의 관계 : 외부대규모기관투자자 및 투자기간을 중심으로

이수준,이윤근,이상철 한국회계정보학회 2018 회계정보연구 Vol.36 No.3

We examine the relationship between institutional investors’ characteristics and audit fees. The characteristics of institutional investors are defined as institutional investors as outside block-holders and long investment horizons which have the incentive to independently monitor the firm’s CEO. In addition, we investigate whether the effect of institutional investors as outside block shareholders on audit fees is more powerful in the companies with long investment horizons of institutional investors than in firms without them. Using a comprehensive sample of 5,308 non-financial firm-year data listed on the Korea Stock Exchange from 2005 to 2014. We find that institutional investors as outside block shareholders and long investment horizons have respectively a positive relation to the audit fees. Moreover, the effect of institutional investors as outside block shareholders on audit fees is more powerful in the companies with long investment horizons of institutional investors than in firms without them. While existing studies consider a institutional investor just a monitoring entity as a whole, this study classifies institutional investors into independent block shareholders and investment horizon, and subsequently analyzes each of their impacts on audit fees. In this respect, this study offers Korean policy makers in developing the opportunities to build effective corporate governance system using the characteristics of institutional investors. 본 연구는 피투자회사 최대주주의 관계회사가 아니면서 5%이상 대규모지분을 투자한 외부대규모기관투자자와 기관투자자투자기간을 경영자를 감시할 유인과 능력을 갖춘 기관투자자 특성으로 구분하고, 이러한 기관투자자 특성이 감사보수에 미치는 영향을 분석한다. 2005년부터 2014년까지 10년간 한국거래소 유가증권시장에 상장된 비금융기업의 5,308개 기업-년 자료를 표본으로 선정하였다. 국내 증권회사를 통해 입수한 기관투자자 현황 자료, 사업보고서 및 회계데이터베이스를 이용하여 기관투자자 특성을 구분하였다. 가설검증을 위한 회귀분석모형을 설정하고 변수를 측정한 후, 검증을 실시하였다. 외부대규모기관투자자가 존재하는 경우가 그렇지 않은 경우에 비해, 감사보수가 더 높게 나타났다. 또한 기관투자자투자기간이 길어질수록, 감사보수가 더 높게 나타났다. 그리고 외부대규모기관투자자가 기관투자자투자기간보다 감사보수에 미치는 영향이 큰 것으로 나타났으며, 기관투자자투자기간과 감사보수 사이의 효과가 외부대규모기관투자자인 경우 더 크게 나타났다. 이러한 결과는 국내 자본시장에서 외부대규모기관투자자와 장기기관투자자가 존재하는 경우, 외부감사서비스에 대한 수요가 높아져서 감사보수가 높아진다는 것을 의미한다. 본 연구결과는 국내 자본시장에서 경영자에 대한 감시유인과 능력을 갖춘 기관투자자 특성을 구분하고 이러한 특성의 효과를 실증적으로 검증했다는 측면에서 학문적인 의의를 찾을 수 있다. 또한 기관투자자와 관련한 정책을 마련하기 위한 근거를 제공할 수 있다는 측면에서 실무적인 의의도 찾을 수 있다.

A Study on the Role of Institutional Investors in the Process of Corporate Innovation Activities

신일항,오원정 한국세무학회 2021 세무와 회계저널 Vol.22 No.5

This study examines whether institutional investors have a significant influence on the process of corporate innovation activities. The process of corporate innovation activities can be classified into research and development activities. Research activities are related to uncertain future earnings rather than development activities and expenditures for research activities are made from a long-term perspectives. Research and development expenditures were respectively used as proxies for the process of corporate innovation activities. The type of institutional investors were classified into foreign and domestic institutional investors. This study used a sample of public companies listed on the Korean Stock Exchange from 2001 to 2014. This study’s main result indicates that foreign institutional investors have a significant positive impact on research expenditures but not on development expenditures. Domestic institutional investors were found to have no significant impact on either research or development expenditures. Foreign institutional investors significantly impact research expenditures in the two-stage instrumental variable approach to address endogeneity factors in foreign institutional ownership. These results suggest that corporate innovation activities may vary depending on the type of institutional investors and that foreign institutional investors take a long-term perspective and increase the corporate innovation activities such as research activities. Empirical findings of this study will provide practical implications for policies that regulate institutional investors who may not monitor managers to under-invest corporate innovation activities and encourage corporate innovation activities.

국내 및 외국인 기관투자자가 한국기업의 장단기 의사결정 및 기업가치에 미치는 영향

노지혜,김동순 한국국제경영관리학회 2022 국제경영리뷰 Vol.26 No.2

We empirically examine whether Korean domestic and foreign institutional investors influence corporate decision-making in the long and short run, and the decision-making in turn affects firm value and corporate performance. In general, institutional investors are considered to have information advantage and can perform a corporate monitoring role. We divide domestic and foreign institutional investors into the two types, i.e., long- and short-term investors in terms of the investment horizon. We also categorize corporate decision-making into long- and short-term decision-making by considering the time lag for which it has an effect on firm value or corporate performance Long- and short-term domestic and foreign institutional investors are defined using both trading data and insider ownership data. Long-term domestic and foreign institutional investors have a significantly positive effect on R&D investment, which is a long-term decision-making variable. By contrast, long-term institutional investors have a significantly negative effect on short-term decision-making, i.e., retained earnings or retention ratio. Domestic and foreign institutional investors seem to prefer long-term corporate decision-making by conducting investment activities for the purpose of portfolio diversification, and there was no significant difference in the impact on corporate decision-making between domestic and foreign institutional investors. We further look into the effect of corporate decision-making on firm value and corporate performance. R&D investment, which is a long-term corporate decision-making process, has a significantly positive effect on Tobin's Q, a proxy for long-term firm value. However, the retention ratio, proxy for the short-term decision-making, has a significantly negative effect on Tobin's Q. We can conclude that domestic and foreign institutional investors alike influence long- and short-term decision-making of Korean firms. In addition, it was found that the decision-making influenced by investors in turn can affect the long-term firm value and short-term performance of Korean firm. In particular, foreign institutions with long-term investment horizon significantly and positively affect firm value. So the study results imply that Korean firms should increase firm value by enhancing the corporate governance structure, and attract long-term foreign and domestic institutional investors. 본 연구는 국내 및 외국인 기관투자자가 한국기업의 의사결정에 미치는 영향과 그 의사결정이 기업의 가치 및 성과에 미치는 영향을 함께 분석한다. 일반적으로 기관투자자는 정보우위를 가지고 기업 경영에 대한 모니터링 역할을 수행함으로써 기업의 의사결정과 성과에 영향을 미칠 것으로 기대된다. 기업의 의사결정이 기업의 성과 또는 기업가치에 영향을 미치는 기간을 고려하여 장기 및 단기 의사결정으로 구분하고, 국내 및 외국인 기관투자자도 순매수 거래량과 소유지분율 정보를 모두 이용하고 장기 및 단기 투자자로 구분하여 분석한 결과, 장기 투자를 하는 국내 및 외국인 기관투자자는 기업의 장기 의사결정 변수인 R&D 투자에 유의한 양(+)의 영향을 미치는 것으로 나타났으며, 단기 의사결정 변수인 내보유보율에는 유의한 음(-)의 영향을 미치는 것으로 나타났다. 이에 따라 국내 및 외국인 기관투자자는 포트폴리오 다각화 및 분산투자를 목적으로 투자활동을 수행하여 기업의 장기 의사결정에 영향을 미치며, 국내 및 외국인 기관투자자간에 기업 의사결정에 미치는 영향은 큰 차이가 나타나지 않았다. 또한, R&D 투자는 기업가치 변수인 Tobin’s Q에 유의한 양(+)의 영향을 미치며, 단기 의사결정인 내보유보율은 Tobin’s Q에 유의한 음(-)의 영향을 미치는 것으로 나타났다. 결론적으로 국내 및 외국인 기관투자자가 기업의 장단기 의사결정에 영향을 미치며, 또한 이들 투자자 그룹의 영향을 받는 기업의 의사결정은 기업의 장기가치 및 단기성과에 영향을 미치는 것으로 나타났다. 이에 따라, 한국 기업들은 향후 지배구조 등을 더욱 개선함으로써 국내 및 외국인 기관투자자, 특히 장기 기관투자자를 유인하고 기업가치를 제고할 수 있을 것으로 기대된다.

기업지배구조와 기관투자자의 역할

이상복(Sang-Pog Lee) 한국기업법학회 2008 企業法硏究 Vol.22 No.4

In many countries. Institutional Investors play an important role in financial market and Corporate Governance Reform. In Korea, the role of Institutional Investors is expecting to reform the Corporate Governance now. But the qualitative growth of Institutional Investors is not made. This article focus on the Institutional Investors and Capital Market, Institutional Investors and Governance, and some proposals for improvement of Corporate Governance by Institutional Investors. First, in relation to Capital Market, this article focus on the growth and characteristics, financial structures, and freedom of capital move. Second, in relation to Governance, this article focus on the dispute and the Institutional Investors as solutions, the development of Corporate Governance System, and the limit of role of Institutional Investors. Third, in relation to some proposals for improvement of Corporate Governance by Institutional Investors, this article focus on the corporate control market and the increasement of effect of Institutional Investors, the role of Corporate Governance Rating System, and the role of the Legal System. The topic of Corporate Governance Reform is maybe external problem that we will solve. The improvement for Corporate Governance shall be the active role of Institutional Investors. For this role, Institutional Investors also need to make an effort to monitor corporation as owners of company and to have much interested in voting rights especially.

스튜어드십 코드와 일본기업의 연구개발투자

조유진(Yu-Jin Cho),이창민(Chang-Min Lee) 한일경상학회 2024 韓日經商論集 Vol.102 No.-

Purpose: This paper explores the influence of both domestic and international institutional investors, recognized as emerging outside blockholders in Japanese firms, on R&D investment. The study aims to understand how these investors impact R&D spending, a crucial factor for sustainable growth, particularly in the context of the implementation of the Stewardship Code. Research design, data, and methodology: The analysis employed panel analysis on 105 manufacturing companies listed on Nikkei225 from 2014 to 2020. We used the intensity of R&D as the dependent variable, with institutional investors holding more than 3% of each company’s shares as the independent variable. By classifying institutional investors, we compared the results between domestic and foreign institutional investors. Results: The analysis revealed that outside blockholders had a significantly positive effect on R&D. However, when institutions were classified, different results emerged. While domestic institutional investors had a significant positive impact on R&D, foreign institutional investors did not yield statistically significant results. Additionally, the financial institution variable, acting as the control variable and related to insider investors, consistently demonstrated a significantly negative effect across all models. Implications: Despite foreign institutional investors dominating the Japanese stock market, it was found that domestic institutional investors have emerged as significant outside blockholders in each firm. Traditionally criticized as passive investors, domestic institutional investors are shown to influence and promote R&D for long-term growth, in line with the Japanese stewardship code. While foreign investors are often associated with potential decreases in R&D for short-term gains such as ROE and dividends, no significant evidence was found. Moreover, with increasing stake ratios, foreign investors have the potential to positively impact Japanese firms in the future.

기업가치에 영향을 미치는 두 가지 측면의 기관투자자 집단

남현정 ( Hyun Jung Nam ),박춘광 ( Chun Gwang Park ) 한국금융공학회 2014 금융공학연구 Vol.13 No.2

본 연구는 기관투자자가 기업가치에 미치는 영향에 관한 선행연구의 다양한 연구결과에 의문을 제기하고, 이런 결과들이 기관투자자의 투자목적에 기인하여 발생된 사실임을 규명하고자 한다. 이를 위하여 기관투자자의 투자목적에 따라, 좀 더 구체적으로1)투자기업과 비즈니스 관계를 구축하고자 하는 기관투자자(압력민감 기관투자자 집단)과 2)투자기업과 비즈니스 관계와는 전혀 무관하게 기업가치 만을 고려하는 기관투자자(압력둔감 기관투자자 집단)으로 분류하고, 이 분류된 두 기관투자자 집단들과 기업가치와의 관련성을 조사하고자 한다. 분석을 위하여, 유가증권시장에 상장된 670개 기업을 분석대상으로 선정하였으며, 선정된 기업들에 대하여 2007년부터 20012년까지 6년 동안의 재무 및 회계자료를 추출하였다. 그 다음에 패널자료분석 중 고정효과모형을 사용하여 이 자료들을 분석하였다. 분석결과, 압력민감 기관투자자 집단은 기업가치에 역(-)의 관계를 나타냈으며, 통계적으로5% 유의수준 하에서 유의한 관계를 나타내었다. 압력둔감 기관투자자 집단은 기업가치에 정(+)의 관계를 나타냈으며, 통계적으로 5% 유의수준 하에서 유의한 것으로 나타났다. 따라서 압력민감 기관투자자 집단인 은행, 보험회사 등의 기관투자자들은 자신들이투자하고 있는 기업에 대하여 신용관리, 현금흐름관리, 중개서비스 등을 제공함으로써, 사적 이익을 취할 수 있기 때문에, 투자기업 경영자를 감시하기 보다는 투자기업과의 담합을 통해 비즈니스 관계를 강화하는 데, 더 많은 관심을 가지고 있다는 간접적인 증거를 제시할 수 있다. 반면에 압력둔감 기관투자자 집단인 연기금, 투자자산운용회사 등의 기관투자자는 의결권을 적극적으로 행사하거나, 투자기업 경영자들에 대한 활발한 감시활동을 통해 기업가치 향상에 기여를 하고 있는 것으로 볼 수 있다. 나아가이와 같은 압력민감 기관투자자 집단이 기업가치에 부정적인 영향을 미치고 있다는 본 연구의 결과는 기관투자자가 기업가치에 역(-)의 영향을 미친다는 기존의 연구결과에 대하여, 좀 더 구체적인 근거를 제시한다고 볼 수 있다. Here, we examines the impact of firm value according to the investment objectives of institutional investors. In accordance with the investment objectives of institutional investors, more specifically, We classify two groups of institutional investors group. 1) Pressure sensitive institutional investors group(it is willing to establish business relationship with the investment companies), 2) Pressure insensitive institutional investors group(it is completely independent of the business relationship only consider the firm value of the investment companies.) For Analysis, the 670 companies listed on the stock market in Korea were finally selected. With respect to the selected companies, we was extracted from the financial and accounting data during 6 years from 2007 to 2012. we have analyzed these data by using the fixed effects model of the panel data analysis. According to the results of analysis, Pressure sensitive institutional investors group showed a negative(-) relationship with the firm value statistically significant at 5% level, respectively. And Pressure insensitive institutional investors group showed a positive(+) relationship with the firm value statistically significant at 5% level, respectively. Thus, Pressure sensitive institutional investors group to monitor the management of the investment company, rather than trying to strengthen business relationships. On the other hand, Pressure insensitive institutional investors group contributes to the improvement of firm value by management to monitoring and controlling.

기관투자자의 의결권행사에 대한 외국의 입법과 동향

송호신 한국교통대학교 2019 한국교통대학교 논문집 Vol.54 No.-

as well as an advanced capital market, and its influence is gradually strengthening. In our society, the exercise of voting rights by institutional investors, especially the national pension, has become a major issue. In Korea, institutional investors have been very passive and non-aggressive in exercising their voting rights as shareholders. Due to the 2008 financial crisis in the US, the social atmosphere began to change in order to strengthen institutional investors' voting rights. On December 16, 2016, the Principles on Trustee Responsibilities of Institutional Investors were enacted and the application of 「the Korean Stewardship Code」was specified. As the argument for strengthening the exercise of voting rights by the National Pension has been strengthened, the debate over the exercise of voting rights by institutional investors is heating up. Then, an in-depth study is needed on what it means to further strengthen the voting rights of institutional investors, what consequences will result, and whether the direction being discussed now is the right direction for the NPS to pursue. Only reinforcement is emphasized without legal discussion and elucidation of concrete content, raising uncertainty and questioning. To address these uncertainties and questions, in II, the meaning and characteristics of shareholder activism, such as the exercise of voting rights of institutional investors, and the behavior of shareholder activism and the exercise of voting rights of institutional investors. III looked at foreign legislation, including legislation related to voting rights for institutional investment and various guidelines. IV addressed foreign trends, including the development of institutional investor voting rights and the attitudes of major foreign institutional investors to voting rights. The last V introduced research and controversy on the exercise of voting rights of foreign institutional investors.