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Sustainability reporting, dedicated and transient institutional ownership, and financial performance

Previous studies on the association between sustainability reporting and the ownership of institutional investors yield inconsistent results. Thus, this thesis examines if the inconsistencies are due to (1) different types of institutional investors, where different preferences to firms‘ sustainab...

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Main Author: Hafizah, Abd Mutablib
Format: Thesis
Language:English
English
Published: 2015
Subjects:
HD2709-2930.7 Corporations
Online Access:http://etd.uum.edu.my/5372/
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spelling my.uum.etd.53722021-03-18T07:10:49Z http://etd.uum.edu.my/5372/ Sustainability reporting, dedicated and transient institutional ownership, and financial performance Hafizah, Abd Mutablib HD2709-2930.7 Corporations Previous studies on the association between sustainability reporting and the ownership of institutional investors yield inconsistent results. Thus, this thesis examines if the inconsistencies are due to (1) different types of institutional investors, where different preferences to firms‘ sustainability engagement are expected to be observed from dedicated and transient institutional investors, and (2) the moderating effect of financial performance, where it is believed that the relationship between sustainability reporting and institutional ownership is only significant when a firm‘s financial performance is high. Using Malaysian setting, a total of 285 firms listed on Bursa Malaysia in the year 2010 and 2011 are selected for this study, which utilizes a one-year lagged data for sustainability reporting and contemporaneous data for institutional ownership. Sustainability reporting is measured by the extent and quality of corporate social disclosures in the annual reports, institutional ownership by the percentage of ordinary shares owned by institutional investors and the return of assets is the proxy for financial performance. The results reveal that sustainability reporting shows positive impact on ownership of dedicated institutions but no impact on the share ownership of transient institutions. Further analysis reveals that sustainability reporting exert positive impact on the ownerships of all three types of institutions defined as dedicated institutions, which are the government-managed pension funds, government-managed unit trust funds and government-managed pilgrimage funds, but no impact on the ownerships of all three types of institutions classified as transient, which are the banks, privatemanaged mutual funds and insurance companies. The results also reveal that dedicated institutions prefer to invest in firms with good sustainability engagement, but poor financial performance, thus they may gain benefit from shareholder activism. Meanwhile, transient institutions only prefer firms with good financial performance, regardless of their sustainability engagement. 2015 Thesis NonPeerReviewed text en /5372/1/s93401.pdf text en /5372/2/s93401_abstract.pdf Hafizah, Abd Mutablib (2015) Sustainability reporting, dedicated and transient institutional ownership, and financial performance. PhD. thesis, Universiti Utara Malaysia.
institution Universiti Utara Malaysia
building UUM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Utara Malaysia
content_source UUM Electronic Theses
url_provider http://etd.uum.edu.my/
language English
English
topic HD2709-2930.7 Corporations
spellingShingle HD2709-2930.7 Corporations
Hafizah, Abd Mutablib
Sustainability reporting, dedicated and transient institutional ownership, and financial performance
description Previous studies on the association between sustainability reporting and the ownership of institutional investors yield inconsistent results. Thus, this thesis examines if the inconsistencies are due to (1) different types of institutional investors, where different preferences to firms‘ sustainability engagement are expected to be observed from dedicated and transient institutional investors, and (2) the moderating effect of financial performance, where it is believed that the relationship between sustainability reporting and institutional ownership is only significant when a firm‘s financial performance is high. Using Malaysian setting, a total of 285 firms listed on Bursa Malaysia in the year 2010 and 2011 are selected for this study, which utilizes a one-year lagged data for sustainability reporting and contemporaneous data for institutional ownership. Sustainability reporting is measured by the extent and quality of corporate social disclosures in the annual reports, institutional ownership by the percentage of ordinary shares owned by institutional investors and the return of assets is the proxy for financial performance. The results reveal that sustainability reporting shows positive impact on ownership of dedicated institutions but no impact on the share ownership of transient institutions. Further analysis reveals that sustainability reporting exert positive impact on the ownerships of all three types of institutions defined as dedicated institutions, which are the government-managed pension funds, government-managed unit trust funds and government-managed pilgrimage funds, but no impact on the ownerships of all three types of institutions classified as transient, which are the banks, privatemanaged mutual funds and insurance companies. The results also reveal that dedicated institutions prefer to invest in firms with good sustainability engagement, but poor financial performance, thus they may gain benefit from shareholder activism. Meanwhile, transient institutions only prefer firms with good financial performance, regardless of their sustainability engagement.
format Thesis
author Hafizah, Abd Mutablib
author_facet Hafizah, Abd Mutablib
author_sort Hafizah, Abd Mutablib
title Sustainability reporting, dedicated and transient institutional ownership, and financial performance
title_short Sustainability reporting, dedicated and transient institutional ownership, and financial performance
title_full Sustainability reporting, dedicated and transient institutional ownership, and financial performance
title_fullStr Sustainability reporting, dedicated and transient institutional ownership, and financial performance
title_full_unstemmed Sustainability reporting, dedicated and transient institutional ownership, and financial performance
title_sort sustainability reporting, dedicated and transient institutional ownership, and financial performance
publishDate 2015
url http://etd.uum.edu.my/5372/
_version_ 1695533672654962688
score 13.211869

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