Abstract:
The relationship between institutional ownership and firm value is a complex and multi
faceted topic. While some studies suggest a positive relationship, others find no significant
effect or highlight the mediating role of other factors. This research focuses on the
relationship between institutional ownership and firm value in non-financial and non
utilities publicly listed companies in Pakistan between 2008 and 2018. Using Tobins-Q as
a proxy for firm value, and foreign institutional ownership and domestic institutional
ownership as independent variables alongside a number of control variables, this research
finds a negatively significant relationship between firm value and institutional ownership.
As a second research question, the research also finds that this result is primarily driven by
domestic institutional ownership, as foreign institutional ownership has positive but
insignificant relationship with firm value.
