Marching to the beat of different drummers: The influence of institutional owners on competitive actions

Brian Connelly, Laszlo Tihanyi, Samuel Certo, Michael Hitt

Research output: Contribution to journalArticle

122 Citations (Scopus)

Abstract

This research extends agency theory by exploring the influence of varied, competing, principal interests on executive actions. Findings reveal that ownership of a firm by dedicated institutional investors, who hold concentrated portfolios over time, is positively associated with firm use of strategic competitive actions. Ownership by transient institutional investors, who hold broad portfolios and make frequent trades based on current earnings, is negatively associated with strategic competitive actions and positively associated with tactical ones. Appreciable ownership of the same firm by these two classes of investors influences both strategic and tactical competitive actions. These results have broad implications for executives, investors, and policy makers. Copyright of the Academy of Management, all rights reserved.

Original languageEnglish (US)
Pages (from-to)723-742
Number of pages20
JournalAcademy of Management Journal
Volume53
Issue number4
StatePublished - Aug 1 2010

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Owners
Ownership
Investors
Institutional investors
Agency theory
Politicians

ASJC Scopus subject areas

  • Business and International Management
  • Management of Technology and Innovation
  • Strategy and Management
  • Business, Management and Accounting(all)

Cite this

Marching to the beat of different drummers : The influence of institutional owners on competitive actions. / Connelly, Brian; Tihanyi, Laszlo; Certo, Samuel; Hitt, Michael.

In: Academy of Management Journal, Vol. 53, No. 4, 01.08.2010, p. 723-742.

Research output: Contribution to journalArticle

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