نقش سرمایه‌گذاران نهادی در سیاست‌های سرمایه‌گذاری شرکت

 
The Role of Institutional Investors in Firm’s Investment Policies
 
Dr. Farzaneh Heidarpoor                Maryam Alsadat Ehsani Tabatabaee
Islamic Azad University, Central Tehran Branch
 
Introduction
Firms may create certain condition for financing decisions by taking reasonable investment decisions. Thus, investment policy dictates firm’s approach for financing. Identifying investment policies determinant factors is one of the main issues for stockholders. The same is true for the managers. This is why managers have concerns about investment policies. Institutional investors gain more and more weight in ownership structure of firms. Considering risks of ownership and investment perspective, institutional investors are expected to take a more important role in firm’s decision making.
 
Research Questions or Hypothesis
There are several reasons to believe that institutional investors monitor firms’ managers. McCahery et al. (2009 (find that institutional investors monitoring frequently intervenes (directly, by giving orders or indirectly by their vote) in firm’s policies if they are dissatisfied with managers performance. They also explain that the main reason for institutional investor‘s interference is not the dissatisfying stock prices but the incompatibility of long term corporate strategies. The main question is that whether institutional investor share has an effect on investment strategies’ firms (real assets) or not? Hypothesis: “there is a significant relation between the share of institutional investors and investment policies.”
 
 
Methods
Multiple linear regression model is shown in relation 1:
(1)  Investment_it = α₀ + α₁ Insider ownership_it-1 + α₂ cash flow_it-1 + α₃ Leverage_it-1 + α₄ Size_it-1 +  α₅Age_it-1 + α₆ stock Returns_it-1 + α₇ P/E_it-1
Investment: The sum of payment on capital expenditure, long term investment and R&D minus receipts from the sale of property, plants and equipment and investment to maintain assets in place (depreciation and amortization).
Insider ownership: percentage of stocks held by institutional investors for fiscal year “t-1”
Cash Flows: net operational cash flow to total assets rate.
Leverage ratio: total liabilities to total assets rate fiscal year “t-1”
Stock returns: stock price change (The stock price at the end of the financial period minus the stock price at the beginning of the period, cash dividend and other advantages such as capital increase and stock dividend.
P/E: Price to earning rate per share. Size: The natural logarithm of total assets.
Age: The number of years firms are present in stock Exchange.
Time and territory: the research focuses on an eight year period from 2004 to 2011 according to the fiscal year. Companies in Tehran stock market constituted statistic population of the research. Samples were gathered using Kokran’s formula. In this way, 66 companies were included in sample group.
 
Results
Normality of dependent variable distribution was ensured through Kolmogorov-Smirnov test. The significance level of the investment for none of the years was less than 0.05. Therefore, H0 for this variable is not rejected which means the variable is normal through the years. Afterward, correlation test was applied to show linearity of the two variables. Considering the results, Pearson’s correlation coefficient for institutional investors, size of firm, leverage ratio, and age of company was significant. However, the three variables including operational cash flow, stock return and P/E had no significant relation with the dependent variable. The significance of the model was first checked with ANOVA table. Afterward, intensity of correlation of the model was examined by using square. By considering the significance level of F that was 0.01(<0.05), the model is accepted. R square obtained was 0.018 which means that 18% of variable changes were caused by independent variables. To find the suitable model, a step by step approach was used. In this method, independent variables are inserted into the model based on significance level until all significant variables remain in the model. The third and final step gives the estimated model as follows:
Investment_it = -1544/86 + 3/45Insider ownership_it-1 -250/74 Leverage_it-1 + 121/27  Size_it-1  + 6/39 Age_it-1
 
Therefore, through controlling three variables in the model, the share of institutional investors’ effect on investment policies is positive and significant.
 
Discussion and Conclusion
The relation between the share of institutional investors and investment policies was explored in the research by adopting six controlling variables. According to previous researches, investment policies are necessary for institutional investors and directly impact corporate value as argued by Jensen and Meckling (1976). An important component of such policies is capital expenditures. Previous studies have surveyed the impact of institutional investors on R&D (Bushee 1998, Aghion 2008) and take-over activities (Mass 2005, Chen 2007). However, their potential influence on investment in real assets has not been investigated. The results showed a direct relation between the two variables of institutional investors and investment policy. That means the bigger the share of institutional stockholder, the more investment is made in them. No relation was found regarding the three controlling variables of operational cash flow, P/E and stock Return. However, leverage ratio had a negative effect on investment policies. There was a direct relation between firm’s age, size and investment.
These results are not consistent with many other researches. Cho (1998) focused on institutional investors and concluded that the investors have no effect on investment. Cella (2010) after surveying institutional investors' role in companies' investment policies argued that there was no evidence that high/low level of investment attract more or less institutional investors. On the other hand, these results are consistent with Wahal &McConnell (2000). They concluded that institutional investors have a positive effect on investment. Bohren & et al. (2007) investigated how firm ownership affects real assets investment, and concluded that gaining more share in company (as measured by G index) is positively related to high level of investment.