This paper shows that the positive correlation between the presence of institutional investors and a firm’s likelihood of being acquired is due to ownership endogeneity, i.e., due to the fact that institutions are better informed investors. After controlling for this ownership endogeneity, the...

This paper shows that the presence of large public pension fund shareholders particularly reduces ex ante bad acquisitions. When firms with large public pension fund presence do acquire other firms, they perform relatively better in the long-run. Other institutional investors have either the...

This paper studies the drivers behind the monitoring effectiveness of institutional investors in curbing earnings management in an international setting. We identify three distinct drivers and propose two competing hypotheses: the hometown advantage hypothesis predicts that because of proximity...

This paper studies whether institutional investors influence corporate environmental, social, and governance (ESG) policies and the impact of such influence on firm performance. We use facility-level toxic release data to proxy for a firm's ESG policies. We use geographic distance and the size...

This paper argues that an external monitor can be less effective when there is uncertainty regarding the quality of the management and the business environment. In a two-period model, an outside monitor, who initially does not know managerial quality, can have the manager fired. The manager...