The Influence of Institutional Shareholdings on Corporate Governance: Empirical Evidences of the Listed Companies on the Stock Exchange of Thailand in the SET100

Abstract

Institutional investors have high influence on capital market so that this research aims to examine the influence of institutional shareholdings on corporate governance (CG) of the listed companies on the Stock Exchange of Thailand in the SET 100. Institutional shareholdings were categorized into four types as follows: 1. commercial banks, mutual funds, insurance companies, and securities public companies in Thailand (FIBTMF), 2. government agencies and state enterprises of Thailand (FIGV), 3. Foreign banks (FIBF), and 4. International investors (FIIN). The CG was measured by the CG scoring of Thai Institute of Directors Association (IOD). The study period covered 2013 to 2017. In addition, the data were analyzed by logistic regression analysis, separated into two models: the first model investigated overall institutional investors toward CG; whilst, the second model examined the four categories of institutional investors as earlier mentioned. As a result, the study revealed that the overall institutional investors had statistically positive influence on the CG at 0.05 level of significance. The second model exposed that government agencies and state enterprises of Thailand as well as international investors had statistically positive impact on the CG at 0.05 and 0.10 level of significance, respectively. Therefore, this research implied the important role of institutional investors toward the CG.