African Journal of
Business Management

  • Abbreviation: Afr. J. Bus. Manage.
  • Language: English
  • ISSN: 1993-8233
  • DOI: 10.5897/AJBM
  • Start Year: 2007
  • Published Articles: 4194

Full Length Research Paper

The impact of institutional ownership on risk-taking behaviors

Gholamhossein Mahdavi1*, Mohammad Monfared Maharlouie2, Mehdi Sarikhani3 and Fahime Ebrahimi3
1Department of Accounting, Management and Social Science, College of Economics, Shiraz University, Iran. 2Department of Accounting, Dariun Branch, Islamic Azad University, Dariun, Iran. 3Department of Accounting, Safashahr Branch, Islamic Azad University, Safashahr, Iran.
Email: [email protected]

  •  Accepted: 09 December 2011
  •  Published: 28 March 2012

Abstract

One of the major factors influencing a company’s performance is undoubtedly the level of risk-taking. As owners of a great deal of company stock, institutional investors can play an important role in determining this level. Therefore, this study has investigated the influence of institutional ownership on the risk-taking behavior of companies that are listed in the Tehran stock exchange. The study has used the standard deviation of monthly return and systematic risk (β) as market risk criteria, and research and development expense and capital expenditure as company risk criteria. This research includes 58 companies from 2004 to 2008, in which ordinary least squares regression models (panel data) and a tobit model have been used. The results show that no meaningful relationship exists between the percentage and concentration of institutional ownership by stockholders and risk-taking behavior.

 

Key words: Institutional ownership, risk-taking behavior, market risk, company risk.

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This article is published under the terms of the Creative Commons Attribution License 4.0

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