The Relationship between Institutional Governance-Ownership and Firm Value

Institutional investors enjoy a significant influence on the corporations and play a strategic role because of owning a considerable portion of corporate shares and due to their supervision role. Moreover، they have sufficient incentives and authority to closely monitor the managers and make changes in the corporate structures. This paper is to examine the effects of the presence of institutional investors in the board of directors as well as the impacts of the amount of institutional ownership and Q. Tobin Ratio as the criteria for measuring the firm value of the corporations listed on the Tehran Stock Exchange (TSE). This paper utilizes a panel data analysis over a nine-year period from years 2001 to 2009. The multiple correlation coefficients and multiple regression analysis are used to test the hypotheses. The results indicate a positive and significant relationship between institutional investors’ governance and institutional ownership on one side and on the firm value on the other.