Can Common Institution Ownership Inhibit the Excess Goodwill?Evidences from China’s A-share Listed Companies

Abstract

Abstract: As the emerging power in the capital market, the governing function of the common institution investors receives extensive attention. From the perspective of the common institution ownership, this paper empirically examines the impact of the common institution ownership on the excess goodwill of the listed companies. The findings show that the ownership of common institutions can effectively inhibit the excess goodwill of the listed companies. It is found through further study that the inhibiting effect of the common institution ownership on the excess goodwill is largely achieved through the scale effect mechanism and the exit threating mechanism. The common institutional ownership can reduce the risk of goodwill impairment after corporate mergers and acquisitions. Therefore,the listed companies should actively introduce the common institution investors, improve the corporate governance, optimize the merger targets, and suppress the excess goodwill.

Key words: common institution ownership, excess goodwill, supervision and governance, goodwill impairments

CLC Number:

F234.4

MAO Yue, HU Guo-qiang, ZHANG Jun-min. Can Common Institution Ownership Inhibit the Excess Goodwill?Evidences from China’s A-share Listed Companies[J]. Contemporary Finance & Economics, 2022, 0(8): 138-148.

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