TITLE:
Game Analysis of Institutional Investors Participating in Corporate Governance
AUTHORS:
Yingzhao Li, Zhenqin Li
KEYWORDS:
Institutional Investor; Game; Tunneling Effect
JOURNAL NAME:
American Journal of Industrial and Business Management,
Vol.3 No.1,
January
17,
2013
ABSTRACT:
By building a game model between the institutional investors and the management, an analysis has been conducted to uncover the influential factors that are crucial to the role switching of institutional investors when confronting tunneling behaviors of the management: supervision cost, shareholding ratio, invisible income, fines and patience. In cases of lower supervision cost, higher shareholding ratios, less invisible income, larger amount of fines, more patience and pursuing long-term gains, institutional investors will tend to play an active role in corporate governance. They will act as an active supervisor to restrain the tunneling behavior of the management.