THE LEVEL AND STABILITY OF INSTITUTIONAL OWNERSHIP AND ITS INFLUENCE ON COMPANY PERFORMANCE IN SOUTH AFRICA

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Abstract

Institutional ownership in companies is an important tool in monitoring and controlling the business interests of the shareholders. This study investigated whether the performance of the Top 100 companies listed on the Johannesburg Securities Exchange is influenced by the level, and stability of institutional ownership. A regression analysis was used to test the relationship between Tobin’s Q and return on assets and the international, domestic and total institutional ownership and the stability of institutional shareholding. It was found that institutional shareholding is an important corporate governance factor to improve firm value. International institutional shareholding has an effect on future firm value, whilst domestic institutional, total institutional shareholding and the stability of total institutional shareholding has an effect on historical firm value.

Keywords: Company Performance, Institutional Ownership, Foreign Institutional Shareholding, Domestic Institutional Shareholding, Ownership Stability

How to cite this paper: Scholtz, H.E., Engelbrecht, W. (2015). The level and stability of institutional ownership and its influence on company performance in South Africa. Corporate Ownership & Control, 13(1-10), 1265-1277. https://doi.org/10.22495/cocv13i1c10p12