The Impact of Borders on the Effectiveness of Active Ownership by European Asset Owners
Various waves of deregulation of financial markets in the past few decades have resulted in capital flowing in and out of countries and regions at much higher speed than in the Post-War period. Large asset owners, e.g., pension funds, have increasingly invested their stakeholders’ assets across the globe and in a variety of asset classes and investment products. These asset owners now jointly own a large share of the world equities markets (estimates range from 50-70%) and as such are responsible for making sure that the management of the companies they invest in acts in the long-term interest of the company, its shareholders and (more recently) stakeholders. Although the investment programs of asset owners globalized rapidly (almost without exception), the level and direction of engagement with company management to a large extent is driven by the legal-, social-, cultural- and political context of the countries the respective asset owners are based in. We are particularly interested in to what extent the legal rules of the companies' country of incorporation, the country of listing and the home country of the asset owners influence the level, intensity and direction of engagement. In addition, we would like to investigate how this difference in context determines the effectiveness of active ownership by asset owners. We will first focus on European countries and in a later stage (potentially) broaden it to other developed markets.
Researcher: Tereza Bauer (see profile)
Supervisors: Rob Bauer, Mieke Olaerts and Mike Simutin (see profiles)