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THE ASSOCIATION BETWEEN INSTITUTIONAL OWNERSHIP AND THE LIKELIHOOD OF THE FIRM REPORTING NON-RECURRING CHARGES
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Uma Velury, Gregory Kane 
Abstract
This paper examines the association between the level of institutional ownership and the likelihood of the firm reporting non-recurring or unusual charges. The increase in the magnitude and frequency of one-time charges has caused confusion and debate in the media (WSJ 2001). This paper posits that increased monitoring on the part of influential stakeholders (e.g., institutional investors) causes management to take corrective actions which leads to the reporting of these charges. If this is the case, non-recurring charges may be informative and value-relevant in the sense that they signal restructuring activity that will likely improve the degree of efficiency in which corporate assets are invested. The results support the hypothesis and indicate that the likelihood of management reporting non-recurring charges is positively and significantly associated with the level of institutional ownership.
Keywords: Institutional Ownership, Non-Recurring Charges, Negative Special Items
How to cite this paper: Velury, U. & Kane, G. (2009). The association between institutional ownership and the likelihood of the firm reporting non-recurring charges. Corporate Ownership & Control, 7(1-3), 363-369. https://doi.org/10.22495/cocv7i1c3p3
