The role of institutional investors in the UK economy

Abstract

This thesis was submitted for the degree of Doctor of Philosophy and awarded by Brunel University.The purpose of this research is to investigate the importance of institutional investors in the UK economy, in particular, the capital market. Institutional investors have grown considerably in size over the past three decades and are involved in many aspects of the economy, consequently investigation of this issue is essential in order to determine their influence. There are three main empirical studies in this thesis. The first examines a sample of UK non-financial firms in an attempt to explain the ownership structure. It will attempt to show which firm variables attract institutional investors. A second aspect of the research is an analysis of the buying and selling activities of institutional investors to see whether they effect the general level of share prices. A third focus of the research is to analyse the switching activities of the institutional investors. This refers to their switching of funds from one type of asset to another e.g. from real property into equities and vice versa. By examining these activities the study illustrates the demand characteristics these institutional investors create for certain assets and in addition it provides a clearer understanding of the economic conditions that influence such investment behaviour. The thesis confirms the continuing importance of institutional investors