Institutional ownership and investment by private companies

Armitage, Seth, Gallagher, Ronan and Xu, Jiaman ORCID: https://orcid.org/0000-0002-3969-0841 2025. Institutional ownership and investment by private companies. The British Accounting Review 10.1016/j.bar.2025.101585

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Abstract

We examine the impact of institutional shareholders on the investment activity and external financing of established private companies. Our sample includes both VC and non-VC institutions, and both controlling and minority ownership stakes. Institutions give rise to higher levels of investment in intangible assets—but not in tangible assets—and higher funding via external equity. These results apply even if the institution has a small non-controlling stake, suggesting that institutions promote investment by alleviating funding constraints. Over 40% of our sample firms display ownership by non-VC institutions only, acting independently of VC funds.

Item Type:	Article
Status:	In Press
Schools:	Business (Including Economics)
Publisher:	Elsevier
ISSN:	0890-8389
Date of First Compliant Deposit:	14 February 2025
Date of Acceptance:	23 January 2025
Last Modified:	14 Feb 2025 14:30
URI:	https://orca.cardiff.ac.uk/id/eprint/176000

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