Thesis
Essays on institutional investors
- Creator
- Rights statement
- Awarding institution
- University of Strathclyde
- Date of award
- 2024
- Thesis identifier
- T16851
- Person Identifier (Local)
- 201851103
- Qualification Level
- Qualification Name
- Department, School or Faculty
- Abstract
- This thesis comprises of three major empirical chapters examining the investment choices and preferences of institutional investors under various exogenous factors. The first empirical chapter examines whether the heterogeneity of foreign institutional investors (FIIs) matters when investing in socially responsible investee firms. Exploiting a mandated corporate social responsibility (CSR) regulation in India and using manually collected CSR expenditure data, the results of a quasi-natural experiment confirm that firms that comply with the CSR mandate attract more investments from FIIs. However, the heterogeneity of FIIs plays a significant moderating role, as FIIs from civil law origin countries, and those considered to be independent and long-term investors, invest more in mandated CSR firms. Finally, the empirical evidence also indicates that firms that comply with the CSR mandate experience higher long-term market-based valuations in the post-CSR reform period. In the second empirical chapter, I investigate institutional investor behavior and firm valuation surrounding extreme rainfall conditions in rain-sensitive firms. Using Indian monsoon data and exploiting extreme rainfall conditions as ongoing natural experiments, I show that institutional investors significantly increase (decrease) their ownership in rain-sensitive firms during the excess (deficit) rainfall years. Despite the extreme rainfall conditions, I show that institutional investors gain from investing in rain-sensitive firms during excess periods, as those firms have superior financial performance in the following period. Further analysis shows that although both domestic and foreign institutional investors increase their ownership in rain-sensitive firms following excess rainfall periods, only domestic institutional investors significantly divest from rain-sensitive firms in deficit periods. The results support the view that extreme climate conditions can impact firm value and change investor behavior. In the third and final empirical chapter, I investigate whether immigration induced fear sentiments affect the investment decisions of institutional investors. Using a text-based measure of immigration fear and data from four developed economies, I show that higher immigration fear sentiments trigger institutional investors to divest from their investee firms. This effect is most pronounced among domestic, independent, and short-term institutional investors. Further, right-wing populism intensifies the negative impact of immigration fear sentiments on institutional investors’ investments. I use an instrumental variable approach and exploit an exogenous event that caused a surge in immigration fear sentiments in my empirical analyses to establish causality and strengthen the findings. Finally, I demonstrate that it is the institutional investors’ fear-based risk-aversion and not information on future firm performance that induces them to make their divestment choices during periods of heightened immigration fear. Overall, from the findings of my thesis, it can be concluded that institutional investors demonstrate differing investment behavior under varying exogenous factors. More importantly, heterogenous institutional investors, characterized by different attributes, investment approaches, and objectives, exhibit differential reactions under different exogenous circumstances.
- Advisor / supervisor
- Marshall, Andrew (Andrew P.)
- Thapa, Chandra
- Resource Type
- DOI
关系
项目
| 缩略图 | 标题 | 上传日期 | 公开度 | 行动 |
|---|---|---|---|---|
|
|
PDF of thesis T16851 | 2024-03-15 | 公开 | 下载 |