The Brake or the Turbocharger? Sovereign Wealth Funds as a Factor Determining Dynamic Changes of Profitability of Capital and Assets in the Listed Company

Dariusz Urban

Abstract


This article aimed at verifying the existence of differences in changes of ROA and ROE in companies listed on the Bovespa with Sovereign Wealth Fund as an investor with comparison to changes in companies without such investor. It also examines the difference in profitability measures in companies before SWFs investing and after. The author employ the U Mann-Whitney test, Kołmogorow-Smirnow test, Wilcoxon signed-rang test and sings test. The empirical findings of the research suggest that in the year following investment there are statistically significant differences in return on equity within the group of targeted companies compared to non-targeted. They also suggest that within the targeted firms the changes of ROE in the year following the investment are greater than those before investing. 


Keywords


sovereign wealth funds; institutional investor; profitability

Full Text:

PDF (Język Polski)

References


Ajina A., Lakhal F., Sougné D., Institutional Investors, Information Asymmetry and Stock Market Liquidity in France, “International Journal of Managerial Finance” 2015, Vol. 11, Issue 1.

Anderloni, L., Vandone, D., Sovereign Wealth Fund Investments in the Banking Industry, “Universita Degli Studi di Milano Working Paper” 2012, No. 24.

Aras G., Müslümov A., Institutional Investors and Stock Market Development: a Causality Study, “ISE Review” 2005, Vol. 29.

BarclayHedge, Alternative Investment Databases, www.barclayhedge.com/research/indices/ghs/mum/HF_Money_Under_Management.html [data dostępu: 31.01.2015].

Bernstein S., Lerner J., Schoar A., The Investment Strategies of Sovereign Wealth Funds, “The Journal of Economic Perspectives” 2013, Vol. 27, No. 2.

Bohl M.T., Brzeszczyński J., Do Institutional Investor Destabilize Stock Prices? Evidence form an Emerging Market, Centre for Economic Reformand Transformation, Discussion Paper No. 1, 2005.

Bortolotti B., Fotak V., Megginson W., Miracky W.F., Quiet Leviathans: Sovereign Wealth fund Investment, Passivity, and the Value of the Firm, University of Oklahoma and Sovereign Investment Lab, 2010 (unpublished working paper).

Bortolotti B., Fotak V., Megginson W., Miracky W.F., Sovereign Wealth Funds Investment Patterns and Performance, “FEEM Working Paper” 2009, No. 22.

Çelik S., Isaksson M., Institutional Investors and Ownership Engagement, “OECD Journal: Financial Market Trends” 2014, Vol. 2013, No. 2.

Chang L.-L., Hsiao F.D., Tsai Y.-Ch., Earnings, Institutional Investors, Tax Avoidance and Firm Value: Evidence from Taiwan, “Journal of International Accounting Auditing and Taxation” 2013, Vol. 22.

Choe H., Kho B.-Ch., Stulz R.M., Do Foreign Investors Destabilize Stock Markets? The Korean Experience in 1997, “Journal of Financial Economics” 1999, Vol. 54, No. 2.

Della Croce R., Stewart F., Yermo J., Promoting Longer-Term Investment by Institutional Investors: Selected Issues and Policies, “OECD Journal: Financial Market Trends” 2011, Vol. 1.

Emerging Market Information Services, http://site.securities.com/php/companies/quick-screener/screener?&frommenu=1 [data dostępu: 20.02.2015].

Fereira M.A., Matos P., The Colors of Investors’ Money: the Role of Institutional Investors Around the World, “Journal of Financial Economics” 2008, Vol. 88.

Fernandes N., Sovereign Wealth Funds: Investment Choices and Implications Around the World, “Working Paper, IMD International” 2009, No. 1.

Fernandes N., The Impact of Sovereign Wealth Funds on Corporate Value and Performance, “Journal of Applied Corporate Finance” 2014, Vol. 26, No. 1.

Fotak V., Bortolotti B., Megginson W., Miracky W., The Financial Impact of Sovereign Wealth Fund Investments in Listed Companies, University of Oklahoma and Università di Torino, 2008 (unpublished working paper).

Frenkel M., Menkhoff L., Are Foreign Institutional Investors Good for Emerging Markets?, “Discussion Paper” 2003, No. 283.

Ghahramani S., Sovereign Wealth Funds and Shareholder Activism: Applying the Ryan-Schneider Antecedents to Determine Policy Implications, “Corporate Governance” 2013, Vol. 13, No.1.

Government Pension Fund Global, www.nbim.no/en/investments [data dostępu: 12.02.2015].

Kaminsky G., Richard K., Lyons R.K., Schmukler S.L., Managers, Investors, and Crises: Mutual Fund Strategies in Emerging Markets, “Journal of International Economics” 2004, Vol. 64.

Kotter J., Lel U., Friends or Foes? Target Selection Decisions of Sovereign Wealth Funds and Their Consequences, “Journal of Financial Economics” 2011, No. 101.

Manconi A., Massa M., Yasuda A., The Role of Institutional Investors in Propagating the Crisis of 2007–2008, “Journal of Financial Economics” 2012, Vol. 104, No. 3.

Mizuno M., Institutional Investors, Corporate Governance and Firm Performance in Japan, “Pacific Economic Review” 2010, Vol. 5, No. 5.

Mukherjee P., Roy M., The Nature and Determinants of Investments by Institutional Investors In the Indian Stock Market, “Journal of Emerging Market Finance” 2011, Vol. 10, No. 3.

Preqin, 2015, www.preqin.com/docs/newsletters/pe/Preqin-Private-Equity-Spotlight-January-2015.pdf [data dostępu: 31.01.2015].

Sovereign Wealth Funds Institute, www.swfinstitute.org/fund-rankings [data dostępu: 31.01.2015].

Transparency of Institutional Investors: European Parliament Resolution of 23 September 2008 with Recommendations to the Commission on Transparency of Institutional Investors, European Parliament, Brussels 2010.

Urban D., Państwowe fundusze majątkowe jako inwestor finansowy, „Prace Naukowe Uniwersytetu Ekonomicznego we Wrocławiu” 2012a, nr 271.

Urban D., Państwowe fundusze majątkowe jako nowy element w architekturze globalnej sieci bezpieczeństwa finansowego, „Zarządzanie i Finanse” 2012b, nr 4(2).

Urban D., W poszukiwaniu finansowych motywów funkcjonowania państwowych funduszy majątkowych i dowodów empirycznych na rynkową orientację tej grupy inwestorów, „Zeszyty Naukowe Uniwersytetu Szczecińskiego. Finanse, Rynki Finansowe, Ubezpieczenia” 2014, nr 802.




DOI: http://dx.doi.org/10.17951/h.2015.49.4.621
Date of publication: 2016-01-28 11:03:52
Date of submission: 2015-07-13 12:41:10


Statistics


Total abstract view - 790
Downloads (from 2020-06-17) - PDF (Język Polski) - 0

Indicators



Refbacks

  • There are currently no refbacks.


Copyright (c) 2016 Dariusz Urban

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.