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 that domestic institutional ownership is the primary driver for the negatively
significant relationship between firm value and institutional ownership in Pakistan, with
foreign institutional ownership having a positive but insignificant relationship with firm
value.
