Author(s)

Qiuli Huang ¹, Guilong Li ¹

Affiliation(s)

¹ Business School, Central University of Finance and Economics, Haidian District, Beijing, China

Corresponding Author

Qiuli Huang

ABSTRACT

In the evolving corporate governance landscape, institutional investors stand out as pivotal figures. This study delves into their complex networks, established via significant investments across companies, to explore if these connections bolster their governance capabilities, especially in overseeing related-party transactions. We assess the impact of geographical proximity between investors and their investees and the role of public information, as indicated by analyst ratings, on their governance functions. Our findings reveal that greater network centrality—represented by degree, closeness, and eigenvector centrality—is associated with heightened related transactions, indicating that these networks enhance information exchange, competitive dynamics, and collective action. Furthermore, geographic proximity and favorable public information strengthen these investor-company ties. Yet, betweenness centrality shows no significant link to improved governance, suggesting indirect information access does not necessarily translate into better governance for one's own investments. This research advances our comprehension of institutional investors' governance role in a tightly interlinked financial ecosystem.

KEYWORDS

Institutional investors, Corporate governance, Social networks, Related transactions

CITE THIS PAPER

Qiuli Huang, Guilong Li, Shareholding Networks and Related Transactions: Insights from Institutional Investors. Accounting and Corporate Management (2024) Vol. 6: 93-100. DOI: http://dx.doi.org/10.23977/acccm.2024.060113.

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