The Department of Banking and Financial Management announces the upcoming seminar with
“Institutional Investors’ Horizons and Corporate Employment Decisions”
Seminar Organizers: Assist. Prof. Michail Anthropelos, Prof. George Skiadopoulos
Supported by Piraeus Bank
|Abstract: Monitoring by long-term investors should reduce agency conflicts in firms’ labor investment choices. Consistent with this argument, we find that abnormal net hiring, measured as the absolute deviation from optimal net hiring predicted by economic fundamentals, decreases in the presence of institutional investors with longer investment horizons. Firms dominated by long-term shareholders reduce both over-investment (over-hiring and under-firing) and underinvestment (under-hiring) in employees. The monitoring role of long-term investors is more pronounced for firms facing higher labor adjustment costs. We address endogeneity concerns by exploiting exogenous changes to long-term institutional ownership resulting from annual reconstitutions of the Russell indexes.|
Konstantinos Stathopoulos is Professor of Accounting and Finance at the Alliance Manchester Business School of the University of Manchester. His main research interests lie in corporate governance. They seek an understanding of how suboptimal governance practices destroy shareholder wealth and lead to crises in the markets, similar to the ones we have observed over the last 20 years. He has published a number of papers in world leading and international journals, including the Review of Financial Studies, Journal of Financial and Quantitative Analysis, Journal of Corporate Finance, Corporate Governance: An International Review, Journal of International Money and Finance, European Accounting Review, among others. More information can be found in his website at https://www.research.manchester.ac.uk/portal/K.Stathopoulos.html.