Institucionální vlastnictví and výnosnost na akciovém trhu: Analýza vybraných firem na burzovních trzích

Institutional investors exert influence over management to enhance organisational performance, but does this result in improved firm performance? This study looked at how institutional ownership affected firm profitability and market returns. It sampled 66 German firms and further divided them into two groups (large and middle) based on their market capitalization, and employed the Fama and French Three Factor Model with adjustments to estimate the effect of institutional ownership on market returns. Using same sample of 66 firms the effect of institutional ownership on firm profitability was also estimated. The panel random effect technique was used to estimate the models. The results showed that institutional ownership had a positive and significant effect on firm profitability (ROA) but was found to exert positive and insignificant effect on profitability (ROE). Similarly, institutional ownership exerted positive and significant influence on stock market returns for the overall sample but negative and significant effect on stock market returns for the large cap. The recommends among others, that institutional ownership of firms in the German economy should be decentralized and invest in other interest yielding assets such as real estate. Further study is also recommended.