This study explores the main determinants of institutional ownership in the MENA region. Using a large sample of 262 listed companies across MENA countries, this study focuses on company and country characteristics that might explain institutional behavior. We attempt to answer the following questions: First, what are the main categories of institutional investors operating in MENA countries? Secondly, what factors drive institutional ownership? Results reveal a weak presence of institutional investors in the MENA region. Unlike foreign and passive investors, domestic and active institutional investors dominate the companies’ ownership. Such findings raise serious issues about how to attract foreign institutional investors. Results also suggest that value stocks appeal to institutional investors, whatever their origin (foreign or domestic) and kind (active or passive). Institutional investors look for large, profitable, and liquid companies that pay high dividends. They prefer investing in highly indebted companies as they consider debt an efficient mechanism to mitigate agency problems. Corporate governance and information disclosure are also crucial determinants of institutional ownership. However, foreign-domestic and active-passive institutional investors have different investment preferences. Our study would contribute to a better understanding of ownership endogeneity within an emerging context. Results would help professionals, managers, and policymakers to adopt appropriate reforms to offer an appealing business climate and attract a large base of institutional investors, not only foreign and active investors.
| Published in | Journal of Investment and Management (Volume 13, Issue 1) |
| DOI | 10.11648/j.jim.20241301.11 |
| Page(s) | 1-14 |
| Creative Commons |
This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited. |
| Copyright |
Copyright © The Author(s), 2024. Published by Science Publishing Group |
Institutional Investors, Ownership Endogeneity, Investors’ Heterogeneity, MENA Region
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APA Style
Belanes, A., Said, K. (2024). Determinants of Institutional Ownership in the MENA Region. Journal of Investment and Management, 13(1), 1-14. https://doi.org/10.11648/j.jim.20241301.11
ACS Style
Belanes, A.; Said, K. Determinants of Institutional Ownership in the MENA Region. J. Invest. Manag. 2024, 13(1), 1-14. doi: 10.11648/j.jim.20241301.11
AMA Style
Belanes A, Said K. Determinants of Institutional Ownership in the MENA Region. J Invest Manag. 2024;13(1):1-14. doi: 10.11648/j.jim.20241301.11
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Download@article{10.11648/j.jim.20241301.11,
author = {Amel Belanes and Khouloud Said},
title = {Determinants of Institutional Ownership in the MENA Region},
journal = {Journal of Investment and Management},
volume = {13},
number = {1},
pages = {1-14},
doi = {10.11648/j.jim.20241301.11},
url = {https://doi.org/10.11648/j.jim.20241301.11},
eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jim.20241301.11},
abstract = {This study explores the main determinants of institutional ownership in the MENA region. Using a large sample of 262 listed companies across MENA countries, this study focuses on company and country characteristics that might explain institutional behavior. We attempt to answer the following questions: First, what are the main categories of institutional investors operating in MENA countries? Secondly, what factors drive institutional ownership? Results reveal a weak presence of institutional investors in the MENA region. Unlike foreign and passive investors, domestic and active institutional investors dominate the companies’ ownership. Such findings raise serious issues about how to attract foreign institutional investors. Results also suggest that value stocks appeal to institutional investors, whatever their origin (foreign or domestic) and kind (active or passive). Institutional investors look for large, profitable, and liquid companies that pay high dividends. They prefer investing in highly indebted companies as they consider debt an efficient mechanism to mitigate agency problems. Corporate governance and information disclosure are also crucial determinants of institutional ownership. However, foreign-domestic and active-passive institutional investors have different investment preferences. Our study would contribute to a better understanding of ownership endogeneity within an emerging context. Results would help professionals, managers, and policymakers to adopt appropriate reforms to offer an appealing business climate and attract a large base of institutional investors, not only foreign and active investors.
},
year = {2024}
}
TY - JOUR T1 - Determinants of Institutional Ownership in the MENA Region AU - Amel Belanes AU - Khouloud Said Y1 - 2024/02/21 PY - 2024 N1 - https://doi.org/10.11648/j.jim.20241301.11 DO - 10.11648/j.jim.20241301.11 T2 - Journal of Investment and Management JF - Journal of Investment and Management JO - Journal of Investment and Management SP - 1 EP - 14 PB - Science Publishing Group SN - 2328-7721 UR - https://doi.org/10.11648/j.jim.20241301.11 AB - This study explores the main determinants of institutional ownership in the MENA region. Using a large sample of 262 listed companies across MENA countries, this study focuses on company and country characteristics that might explain institutional behavior. We attempt to answer the following questions: First, what are the main categories of institutional investors operating in MENA countries? Secondly, what factors drive institutional ownership? Results reveal a weak presence of institutional investors in the MENA region. Unlike foreign and passive investors, domestic and active institutional investors dominate the companies’ ownership. Such findings raise serious issues about how to attract foreign institutional investors. Results also suggest that value stocks appeal to institutional investors, whatever their origin (foreign or domestic) and kind (active or passive). Institutional investors look for large, profitable, and liquid companies that pay high dividends. They prefer investing in highly indebted companies as they consider debt an efficient mechanism to mitigate agency problems. Corporate governance and information disclosure are also crucial determinants of institutional ownership. However, foreign-domestic and active-passive institutional investors have different investment preferences. Our study would contribute to a better understanding of ownership endogeneity within an emerging context. Results would help professionals, managers, and policymakers to adopt appropriate reforms to offer an appealing business climate and attract a large base of institutional investors, not only foreign and active investors. VL - 13 IS - 1 ER -
Department of Finance and Economics, College of Business, University of Jeddah, Jeddah, Saudi Arabia
