| The Effectiveness of `No` Voting Right of Institutional Investors based on Improvement of Independence of the Board of Director |
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Yoona Lee, Kang Heum Yon, Hanna Kim |
| 이사회의 독립성 개선여부에 따른 기관투자자의 반대 의결권 행사의 실효성 |
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이윤아, 연강흠, 김한나 |
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| Abstract |
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This paper investigates how the relationships between shareholder activism of institutional investors and independence of the board of directors affect firm value in KOSPI from 2005 to 2014. We measure shareholders activism in `vote no` ratio and use independence of the board of directors to independent outside board of directors. We find that the higher opposite ratio of institutional investors` voting right, the better improving the independence of board of directors. In addition, the improving effect of firm value by opposite voting from institutional investors is more significant in case of being better independence of board of directors. Also, the effect of interaction between `no` voting ratio and improvement of board of directors` independence is observed significance in the bottom section that is satisfied with managerial entrenchment hypothesis. As a result, active shareholder behaviors of institutional investors improve the governance of target firm and control the optimistic managers. So, we suggest that institutional investors carry out their duties faithfully. |
| Key Words:
`No` Voting Right of Institutional Investors,경영자지분율,기관투자자의 반대 의결권 행사,기업가치,내부지배구조,이사회 독립성,Firm Value,Independence of the Board of Directors,Managerial Ownership,Shareholders Activism |
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